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STATE OF NEW YORK.
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PROCE uDINGS

ip:

Bl CiilllEI «« MUMS,

APPOINTED UNDER A RESOLUTION OF THE

ASSEMBLY

INVESTIGATE ALLEGED ABUSES

MANAGEMENT OF RAILROADS

CHARTERED BY THE STATE OF NEW YORK.

NEW YOBK:
Evening Post Steam Pkesses, 208 Bboadwat, cob. Fulton Stbeet.

1879.

PROCEEDINGS.

The Committee appointed under the following resoUition of the
Assembly, adopted February 28th, 1879 :

Resolved, That a special Committee of five [afterwards increased
to nine] persons be appointed, with power to send for persons and
papers, and to employ a stenographer, whose duty it shall be to
investigate the abuses alleged to exist in the management of the
railroads chartered by this State, and to inquire into and report
concerning their powers, contracts and obligations ; said Com-
mittee to take testimony in the city of New York, and such other
places as they may deem necessary, and to report to the Legisla-
ture, either at the present or the next session, by bill or otherwise,
what, if any, legislation is necessary to protect and extend the
commercial and industrial interests of the State.

Composed of Messrs. Hepbuen, Husted, Duguid, Low, Ge4dt,
NoYES, Wadswoeth, Terey and Bakee, met at the Capitol in the
City of Albany on Wednesday March 26th, 1879, at 3 o'clock p. M.,
and was called to order by the Chairman.

The Clerk called the roll of members and announced all present.

The Chaieman — Gentlemen : We have been appointed a commit-
tee, by a resolution of the Assembly, to conduct an investigation
into tlie abuses alleged to exist in the management of railroads in
this State.' What we were directed to do by the resolution of the
Housp'. was in such very general terms that the first duty incumbent
upon us was to determine to what extent we would go, and the
method and manner in which we would pursue this investigation.
I knew of no better way to arrive at a conclusion than by address-
ing letters to different representative organizations throughout the
State, asking them to come before the Committee and prefer
charges, in order that we might therefrom determine what to do.
After consulting each member of the Committee in regard to this
project, I wrote and caused to be printed the following circular

STATE OF NEW YOEK. ]

In Assembly. >-

Kooms of Special Committee on Eailroads. j

Albany, March 19, 1879.
Dear Sir : — You are respectfully requested to appear before the
above Committee on the 26th day of March, 1879, at their rooms
in Albany, at three o'clock p. M., and make a specification of the

abuses deemed to exist in railroad management in this State, and
to suggest to the Committee such line of investigation (both as to
scope and detail) as in your judgment is best calculated to expose
such alleged abuses, and put the Committee in position to suggest
proper remedies therefor.

In case you cannot be present in person, a concise, pointed and
specific communication in writing, would be very acceptable.

Yours, etc.,

A. B. Hepbuen,

Chairman.

This letter was addressed to the Chamber of Commerce of the
City of New York, to the Board of Trade and Transportation, to
the Grocers' Board of Trade, to the Mayor of every city in the
State, to the Board of Trade in every city which had a Board of
Trade, and to other organizations. It was not addressed to
individuals in any instance. The memorial upon which this in-
vestigation is instituted has been generally recognized and
designated throughout the State as the resolution of the Chamber
of Commerce, and I understand that the Chamber of Commerce are
represented here to-day. I therefore call upon that organization,
through its representatives, to present to this Committee such
suggestions as they may have prepared in accordance with this
letter.

Mr. Jackson S. Schultz — Mr. Chairman and Gentlemen : — By
reason of the fact, perhaps, that I stand at the head of the Com-
mittee so far as this country is concerned — our real Chairman
being in Europe — I desire to state that we have had many meetings
upon this subject, and we have come to a condensed conclusion in
regard to the wrongs we have suffered. "We have appointed Mr.
Thurber, who is very familiar with this subject, as our representa-
tive to state more in detail our difiScuIties and the wrongs which
we wish righted. I would beg leave, therefore, to introduce to
this Committee Mr. Thurber, of New York, who will present to
you the case.

Mr. Fkancis B. Thueber— Mr. Chairman and Gentlemen :— I
might say that the Committee, for the sake of convenience,
embodied their views in a statment and had that put in print, so
that we can leave copies with you. With your permission I will
read it to you.

To the Honorable the Chairman and Members of the Special Committee
appointed by the Assembly for the Investigation of tlie Ifethods of
Railroad Blanagement in this State :

The undersigned members of the Committee on Eailroad Trans-
portation of the Chamber of Commerce respectfully ask your con-
sideration of the following :

TTie assembly has graciously conceded this investigation in re-
sponse* to the following memorial, adopted by the Chamber of
Commerce, February 6, 1879 :

" To the Honorable, the 3Iembers of the Assembly of the State of Neto
York:

May it please yovir Honorable body : Your memorialists re-
spectfully repesent to your Honorable body that the producing,
commercial, and other interest of the State, and particularly those
of the City of New York, have suffered greatly, and are still suffer-
ing by reason of the unjus*- discriminations and other defects ex-
isting in the management of the railroads chartered by the State
of New York ; that said railroads arfe in the habit of carrying
freight for the citizens of other States, and also for citizens of
foreign countries, at lower rates than for citizens of the State of
New York ; and also that individual citizens of this State are
given special privileges and rates out of all proportion to those
charged the public in general ; that the rates for transportation
are made unnecessarily high by the maintenance of subsidiary or-
ganization, designed to deplete the revenues of the roads before
they reach the stockholders ; that the rights of stockholders are,
in other ways, disregarded ; and that there is a general lack of
that publicity and responsibility to the public which properly be-
long to organizations exercising a great public function like that
of operating public highways.

Your memorialists, therefore, earnestly request that a Special
Committee may be appointed, with all necessary powers, whose
duty it shall be to investigate these and other alleged abuses ; to
inquire into and report concBrning the powers, contracts, and
obligations of the railroads chartered by this State ; and that said
Committee be instructed to take testimony in the City of ' New
York and such other places as they may deem necessary, and to
report, by bill or otherwise, during the present or the next session
of the Legislature.

Your memorialists would call attention to the fact that tlie
revenues collected by the railroads exceed by more than ten fold the
entire reA'enues of the State derived from taxation ; and notwith-
standing the overshadowing importance to the public of honest
and equitable management of our railroads, and notwithstanding
all the changed conditions of the age in which we live, most of
them consequent upon the enormous development of this interest,
there has been no supervision or regulation of this interest, and
but little legislation, except that sought by the railroad^ them-
selves, since these modern highways were in their infancy.

Tour memorialists, therefore, pray that a thorough investiga-
tion into their management may be at once instituted.
And your memorialists will ever pray."

We respectfully call your attention to the fact that the principle
"of the King's highway" from the earliest period has been one of
absolute equality for all classes of citizens, and in all the early
English laws pertaining to the organization of society this prin-
ciple is a prominent feature. With the introduction of the improved
highways, known as railways, however, the ownership passed from
the community at large into the hands of capitalists, who, to re-
munerate themselves for the investment were permitted to charge
certain tolls, or rates, for transportation. So eager were the pub-
lic to avail themselves of the enormous advaotages of steam, that
they granted almost every privilege which the associations of in-
dividuals who proposed to construct these improved highways
asked for, and the result has been that the great blessing has been
accompanied with attendant evils which are now crying loudly for
remedy. While the improved highways were in their iufancy
these evils were hardly apparent, but by the combination and con-
solidation of the small and weak companies, they have grown into
enormous organizations, controlling absolutely the production and
commerce of whole sections of country, dictating values to
producers, manufacturers, merchants, and consumers. The value
of an article is what it will bring at the point of consumption, and
if a bushel of corn is worth a certain price in New York, the pro-
ducer realizes that amount, less the charge for transportation, and
this, as is well known, in many instances is by far the larger por-
tion of its value.

The railroads, therefore, have the power absolutely to fix the
reward which every man shall receive for his labor, and it is prob-
able that your investigation will show that this power is abitrarily
exercised, that the rights of entire communities are disregarded ;

the commerce of one city or town artificially stimulated at the ex-
pense of others, and the principal of "the public highway" en-
tirely disregarded by favoritism to individual, which practically
makes one man rich at the expense of his neighbors.

It may be found upon investigation that some of these charges are
in whole or in part unfounded, for the principal sources of informa-
tion have been in the possession of the railroads and carefully kept
from the knowledge of the public. We shall be only too glad if
this should prove to be the case, but the vigorious opposition of
railroad managers to all investigation and supervision, tends to
confirm fair-minded men in the opinion of its necessity. It has
been reported to us that persons in the interest of the railroads
had spoken of our efforts as a communistic movement against
capital invested in railroads. We believe that such an absurd
charge wiU react upon those who give it currency, for the record
of the Chamber of Commerce is such that it can never be accused
of making unjust war upon any interest ; but your Committee be-
lieve that the time is at hand when, if the railroads chartered by
this State refuse to do justice to the public, the merchants and real
estate owners of New York city must join hands with the produc-
ing, manufacturing and merqantile interests throughout the State
in an effort to compel them to do so.

With your permission we will now present seriatim the com-
plaints before alluded to, and ask that they be investigated by re-
quiring the officers and agents of the New York Central & Hudson
River Railroad, the New York, Lake Brie & Western Railroad, and
of such other roads as may seem necessary, to appear before you
and testify in regard to the matters concerned. Also that such other
persons be summoned as may be necessary to thoroughly eluci-
date the subject under consideration.

1. Regarding the charge " that said railroads are in the Jiabit of
carrying freight for the citizens of other Slates, a')id also for citizens of
foreign countries, at loiver rates tlmn for citizens of the State of Neiv
York."

This charge involves the question of through and local rates on
both east and westbound freight and also the relative reasonable-
ness of east and westbound rates. While it is manifestly unjust to
expect a railroad to carry freight at the same rate per ton per
mile on a short haul that it does for a long haul, we believe that
there now exists too great difference between through and local
rates on both east and westbound traffic. The Railroad Gazette,
in an article entitled "The Legal Sanction of Combinations," after

discussing the probabilities of the public sanctioning legislation
which would enable railroads to enforce combination agreements
on each other, says :

"The enormous differences between through and local rates
which are the inevitable consequences ot the present method of
doing things are the occasion of most of the dissatisfaction with
railroads, and they are doubtless the cause of much actual injury
to a great many persons."

As an illustration of this, the rate for grain from Chicago to New
York is now eighteen cents per hundred pounds, with instances,
we believe, of special shipments at less figures, while the producers
living along the line of railroads in New York State are charged
much more than this rate for one-third to one-quarter the distance,
or, say, five or six times as much in proportion as their western
brethren. The same injustice is done to manufacturers in this
State who are obliged to pay such disproportionately high rates
that it is to their interest to locate in States further west. If this
is a good principle, why should it not apply to passenger as well
as freight business ?

Westbound freights are carried cheaper for citizens [of foreign
countries than for citizens of this State. For instance, an English
merchant is given a rate from Liverpool to Chicago less than the
combined ocean rate to New York and rail rate to Chicago. Why
the laws of New York should tolerate this discrimination against
its citizens it is difficult to see, for the two kinds of carriage are
distinct and the function of one carrier ceases when the other be-
gins. There is no good reason why a railroad should haul a car-
load received from a ship any cheaper than one received from the
drays of a merchant in New York. At times freight has actually
been carried from Liverpool to points in the United States 1,000
miles inland cheaper than the same lines would deliver it on the
wharf in New York, the railroads taking their pi-o rata share of the
through rate.

Another anomaly is the enormous difference in the rates charged
by the railroads on through east and westbound freight. With a
full traffic, eastbound rates from Chicago to New York fourth-
class goods are now eighteen cents per hundred pounds, while with
two-thirds of the cars returning empty, rates from New York to
Chicago for the same class are forty cents, a rate which is prac-
tically prohibitory for heavy and bulky goods of low value. East
bound rates are less than westbound, owing to the lack of unity
of action by the western connections of the trunk lines, or in other

-words, the natural law of competition is in the one case left free
to work, while in the other it is abrogated, the New York roads in
each case receiving their 'pro rata portion of the through rate ac-
cording to mileage.

2. Regarding the second allegation, " That individual citizens
in this State are given special privileges and rates out of propor-
tion to those charged the public in general." For instance, the
schedule rate from New York to Syracuse on the New York
Central Eailroad is 50 cents per one hundred pounds for
first-class, 40 for second-class, 3i for third-class, and 23 for
fourth-class. These rates the great mass of the people have
to pay, but a few favored shippers at Syracuse are given
rates, we are informed, as low as 10 or 12 cents per one hundred
pounds on all classes, as compared with 50, 40, 34 and 23, which
most people have to pay. Now, while it is quite right that the
shipper of a small quantity should pay more than the shipper of
a large quantity, we respectfully submit that the difference should he
the actual additional cost of transporting the smaller quantity. In
short, that the principle of equality on public highways should
here apply, and that every citizen should ,have equal rights under
the same circumstances. We believe that the public interest de-
mands that this great discrimination between individuals should
be abohshed, and that even the interests of the railroads demand
it ; a large number of small customers are more desirable than
a small number of large ones, because they will pay a better average
rate. Individual enterprise is encouraged among a larger number
of persons, and both passengers and freight business would be
stimulated by a nearer, approximation in the rates charged small
and large shippers. But aside from a question of interest there
is a question of right involved which cannot be disregarded. This
principle is recognized in our postal system to even a greater
extent than we advocate for our transportation system, for here
everybody, whether he sends one letter or a thousand, is on the
same footing. Performing a public function, a railroad is upon a
different basis from the private citizen, and has no right to sell its
commodity-transportation at a lower price to one person than to
another, except where cost of service enters into the question, and
then only so far as it does so enter. This may be a difficult mat-
ter to decide, but by careful study the difference in cost of trans-
porting small and large quantities can be closely defined. At
present there can be no doubt but that the producers and smaller

class of merchants in this State are taxed enormously for trans-
portation service as compared with the large shippers to wnom
special contracts are. given. In some cases this discrimination
amounts to virtual prohibition, as for instance the Syracuse rates
above mentioned, and on coal, regarding which we find in the
report of the Assembly Committee for the investigation of the
coal combination in 1878 (page 9), the following words :

" The Erie Eailroad having, with many of the large producing
companies, contracts for the carrying of coal at comparatively low
rates, dependent largely upon the price of coal, as to amount,
shield and protect these companies and those in their interest
from the competition of other coal producers, and practically shut
out all competition upon the lines they control."

The recent developments regarding contracts with the Standard
Oil Company seem almost incredible, and show to what an extent
individual effort in any branch of business may be crushed out by
a combination between our modern highways and favored in-
dividuals.

3. " That the rales of transportation are made unnecessarily high
hy the maintenance of suhsidiary organizations designed, to deplete the
revenues of tJie roads be/ore they reach the stockholders."

Prominent among these are the fast freight lines, bridge com-
panies, rolling stock companies, local lines leased at exorbitant
rates through collusion of managers, stockyard companies, con-
struction and supply companies, lighterage companies, elevator
and other terminal facility companies. These and the practice
known as stock watering have, perhaps, done more to enhance the
cost of transportation to the public than any other cause ; or, in
other words, to afford a pretext for charging the public unneces-
sarily high rates for transportation service. Striking instances of
this practice may be found in the history of the New York Central
& Hudson Eiver and Erie Railroads ; the former, according to
current report, having first watered its stock at the time of con-
solidating the various links between Albany and Buffalo, and
subsequently in 1867 and 18ti8, when, it is said, some forty-seven
millions of dollars were added upon which dividends have been
declared, which, with interest, amount to over fifty millions of
dollars. Is it just, that the production and commerce of this State
shall be taxed for all time, to pay dividends upon fictitious liabiU-
ties thus created ?

The report upon the coal combination above alluded to, page 8,
says :

" During the receipt of these enormous profits many of the coal
corporations, as was the case with railroads not engaged in the
coal carrying trade, unable under their charters, or for other
reasons, to declare dividends upon their stock that would absorb
their unexpended surplus, issued additional stock to the stock-
holders, for which they paid, nothing, inaugurated what is com-
monly known as stock- watering, or a capitalization of surplus
earnings, whicli is in substance exacting money from the people,
creating an indebtedness representing the same, and making this
the basis for forever asking the public to pay interest upon their
own money so exacted."

The railroad law of this State provides that when profits exceed
ten per cent, upon the first cost of railroads over and above the
cost of operating and maintenance, the rates for transportation
may be reduced by the Legislature so that they will not yield
more than this sum, but such practices entirely annul and defeat
the evident intention of legislators to protect the public interest
after a fair return is received for the capital actually paid for
providing these facilities. These subsidiary organizations are
originated and fostered by the managers or officers of the roads,
who thus use their positions to serve their own pecuniary interests
at the expense of stockholders or the public. Mr. Wm. H. Van-
derbilt wrote a letter to the chairman of our committee under date
of February 21, 1878, in relation to the terminal expenses of the
railroads at New York ; in that letter he used the following words :

" Every burden of this description is paid directly by the railroad
but necessarily reimposed upon its traffic."

It seems to us that these words also apply in equal degree to the
subsidiary organizations above noticed.

4. " That the rights of stockholders are, in otJier ways disregarded."
By an abuse of the proxy system, bad management of a railroad
can be almost indefinitely perpetuated. Even without proxies one-
third of the stock of a large corporation acting in a body can usually
control an election, the two-thirds being scattered and unorganized ;
but under the present system of buying and selling proxies, stock-
holders, outside of the managing ring, have little chance for justice ;
and almost none for overthrowing a corrupt management. There
is also a great absence of reUable, detailed information regarding

tlie condition of railroad companies, and investors are almost en-
tirely in the dark in this respect. In our opinion provision should
be made for the representation of the holders of a minority of
stock in Boards of Directors and such regular and reliable state-
ments provided for as will make investments in stocks less hazard-
bus than it is under the present system.

5. " That there is a general lack of that publicity and responsiUlity
to the public which properly belong to organizations exercising a great
public function like that of operating public highiuays." We would
say that we believe that rates should be regularly posted at every
station ; that they should be the same to all under like circum-
stances ; that a unit of quantity should be established beyond
which no one should have lower rates, and that the rights of per-
sons who ship less than this quantity should be defined and rates
established therefor, only so much higher as it costs to transport
the smaller quantity. We believe that the present management
of our railroads is, in many respects, abitrary and inconsistent,
among which we may mention the arranging of freight tariffs and
classifications, in which the public interest is seldom consulted.
An instance of this was the abrogation by the pool lines of the
fifth or special class on west bound freight, by which the trade in
heavy goods of low value, such as soda ash, cement and salt is
greatly injured. The present classification is full of inconsisten-
cies ; for instance, a bale of sheetings which in 1864-5 was worth
$400 to $500, is now worth but $50 to $60 ; the average value of a
chest of tea in 1865 was, perhaps, $50, while at the present time it
is about $12, yet in both of these instances the articles remain
classified the same as they were fourteen years ago.

The pooling system above alluded to is worthy of your attention.
It is ostensibly a device for preventing railroad wars and securing
uniformity and permanence in rates, objects which in themselves
are very desirable, but the present pool is objectionaiDle in that it
enforces too high rates on west bound freight. It maybe the only
method by which dividends can be paid upon the inflated capitals
of the trunk lines, but in the minds of many persons there are
grave doubts as to whether the public should be thus taxed. It is
safe to say that, as a whole, the railroads of the United States are
capitalized on a basis of two dollars to every one actually paid in
providing these facilities, and they could probably be constructed
to-day for one-third their present nominal value. Combinations
and pools are the only methods by which returns can be paid to

the holders of such raUroad securities at present, even with honest
management, and in too many cases the interests of stock and
bondholders are subordinate to those of a managing ring, who pur-
posely and dishonestly deplete the revenues so, that the majority
of the bona fide owners got nothing ; and if it be decided that the
maintenance of such rates are unjust to the public, then a prohi-
bition of pooling and combinations is the shortest way to reach
such a result ; for the natural competition of railroads would soon
result either in scaling down present obligations or in bankruptcy
(the same as mercantile houses which by their nature are unable
to combine) and if reorganized upon a basis of actual value, they
could then perform the service at a rate which would be just to the
public and at the same time afford a fair return to shareholders.
Such a process involves hardship to many persons who now hold
these securities, and it is only a question whether or not the great-
est good of the greatest number demands such. a course. We are
of the opinion that the rest of the community have already, to a
great extent, undergone this process of " getting down to hard pan,"
and that the sooner such a basis is reached by the railroad interest
the sooner a permanent and enduring prosperity will be attained.
The pool lines have also established differential rates between
the principal seaboard cities and western points, in which occurs
the curious anomaly of Baltimore, Philadelphia and Boston all
being accorded lower rates than New York, the first two osten-
sibly because their distances to western points are shorter, and
the latter because its distance is longer, or in other words be-
cause Boston has the advantage of a competing road (the Grand
Trunk), which by reason of its situation cannot enter the pool.
The present managers of the New York trunk lines profess
to be powerless to remedy this discrimination, because they say
to give equal rates to New York would divert business from other
seaboard cities, and this would bring on a railroad war. Yet on
through business to and from foreign ports the rate is the same
through all our seabord cities, and it would seem as if there is no
good reason why it should not be so on traffic which stops at the
seaboard. As regards our own city, we are fully convinced that
New York merchants are entitled to not only as low but even
lower rates on westbound freight than from any other seaboard
city, the "distance argument" being far outweighed by the pre-
ponderance of business furnished by our city and by other con-
siderations well known to railroad experts. It is a fact admitted
among railroad men that it costs the New York Central Railroad,

distance notwithstanding, considerably less to take goods from the
.seaboard to the west than it does either the Baltimore & Ohio
or the Pennsylvania Railroad, and if the doctrine enunciated by
Mr. Vanderbilt in one of his letters is to be accepted, which is
substantially that the natural advantages of New York must be
abrogated at the dictation of the Baltimore & Ohio and Penn-
sylvania Eailroads, in order to prevent a railroad war, then our
merchants must look forwatd to establishing branch houses in
other seaboard cities, our owners of real estate to accepting a
further reduction upon their already greatly reduced rentals for
property, our municipal authorities to a reduction in tax-paying
power, which not only will ineA'itably compel a wholesale reduction
in the expenses of government, bat also impair our ability to pay
interest upon our municipal securities, in which, through the sav-
ings banks, the savings of the people are largely invested.

The late Cornelius Vanderbilt, previous to his death, stated
that New York should have rates for raih'oad transportation as
low as any competing city, and your Committee have been loth to
believe that the present managers of this great highway are dis-
posed to pursue a policy which is not only unjust and detrimental
to New York's interests, but which cannot fail to injure their own.
The Erie canal, doubtless, concentrates a large business at New
York, which, during the winter mouths, yields a large revenue to
the railroads, but the Erie canal cannot contain the great jobbing
trade of New York, because this is dependent chiefly upon rail-
roads for the distribution of its merchandise tliroughout the coun-
try ; with this, once diverted, and with manufactories of many
articles firmly established in the interior, the property of Mr.
Vanderbilt and of. other citizens will depreciate together. Thus
far the depreciation has been all on one side, but it cannot always
be so, nor can Mr. Vanderbilt, even if so disposed, continue to
maintain rates which yield 8 per cent, upon a largely inflated cap-
ital, besides a personal revenue scarcely inferior, derived from a
variety of subsidiary corporations designed to deplete the revenues
of his road before they reach the stockholders. No one can have
failed to notice the diversion of our jobbing trade above alluded
to ; the changes which have taken place in the dry goods, grocery,
hardware and other leading trades are enormous, and it may safely
be said that New York jobbing houses generally are at the present
time doing business on unsatisfactory margins, which they are
forced to do in order to make up for the discrimination against
them in freights, and this is perhaps the least injurious feature of

the situation, the loss of prestige being even more hurtful than
the actual money loss. All .New York jobbers know that the " dif-
ference in freights" is constantly and effectively used as an argu-
ment against them, both by the interior jobbers who are favored
with low special rates, and also by the distance discrimination in
favor of other seaboard cities. This is a phase of the transporta-
tion question not generally appreciated; some persons cannot
understand that, with our export figures so satisfactory, there can
be much cause for complaint ; but most of the produce exported
merely passes through on its way to a foreign market, yielding
l)ut little profit to New York, while a jobbing or distributive trade
of smaller proportions is much more remunerative. The railroads
apparently care nothing for the jobbing trade of New York so long
as they can secure the large export and import trade, and also
charge the present enormous bcal rates to the people of this
State ; but this policy is most detrimental to New York City, and
the lack of prosperity for this city means a poorer market for the
producers of this State and an inability on its part to contribute
a million of dollars per annum more than its pro rata share to
maintain the public schools of the State ; this the members from
the interior of the State, who were free from railroad influence and
who voted for the investigation, doubtless fully understood.

Your Committee believe that New York has a prior claim to this
trade, as it first settled and naturally belongs here. The rail-
roads have no right to break up the jobbing trade of this city, and
transfer it to the interior either of our own or other States, nor do we
think they have the right to so discriminate between large and small
shippers as to prevent the latter choosing in what market they
will make their purchases. It was for the purpose of having an
impartial trial of the questions at issue between the railroads and
the public that an investigation was asked for ; we believe this is
due alike to the public and the railroads. Similar investigations
in England have gradually defined the rights of the public, and a
permanent National Board of Commissioners has been established
to supervise the working of this great power for good or evil.

Upon the thoroughness of your investigation depends, in a great
measure, the commercial and industrial welfare of the entire com-
munity. It is hardly possible to imagine a subject of greater im-
portance, or one which affords wider scope for patient, statesman-
like investigation. We venture to express the hope that sufficient
time will be given to the subject to make the examination an ex-
haustive one, and that, if any additional powers are required for

that purpose, that they may be conferred upon your honorable
Committee by the Assembly. For your convenience we recapitu-
late below some of the points which seem to us to be worthy of
investigation :

1. Whether the railroads chartered by this State carry freight
for citizens of other States, and also for citizens of other countries,
at lower rates than for citizens of the State of New York ?

2. Whether individual citizens of this State are given special
privileges and rates out of proportion to those charged the public
in general.

3. Whether the rates for transportation are made unnecessarily
high by the maintenance of subsidiary organizations designed, or
which have the effect, to deplete the revenue of the roads before
they reach stockholders, including the effect of the practice known
as " watering of stock," or " capitalization ol surplus earnings,"
and to what extent these practices have obtained ?

4. Whether the rights of stockholders are adequately protected?

5. Whether there is a lack of that publicity and responsibility
to the public which properly belong to organizations exercising a
great public function like that of operating public highways ; in-
cluding under this head] the arranging of freight tariffs and classifi-
cations ; the effect of the pooling system ; the differential rates
charged on New York freights, as compared with other seaboard
cities and their effect ; the effect of present local tariffs upon the
jobbing trade of New York; what has been done to regulate trans-
portation by railroad in other States and countries ; and such
other branches of the subject as may appear worthy of attention
for the purpose of fully elucidating it.

All of which is respectfully submitted.

Jackson S. Schultz,
Benj. B. Sherman,
Feancis B. Thurbeb,
Charles C. Dodge,
Jacob Wendell,
Benjamin G. Arnold,

Committee.

I might say, Mr. Chairman and Gentlemen, that we have here
to-day representatives of nearly all the commercial organizations
■in New York, and that most of them have approved of this general
statement which the Chamber of Commerce Committee has put
before you. There are some points, I believe, which the Board of

Trade and Transportation thought were not covered by this state-
ment of our Chamber of Commerce Committee, and I believe they
have a statement prepared to present to you.

The Chaikman — Mr. Thurber, as I understand you, the matter
presented by the Chamber of Commerce is covered by the points
in your recapitulation ; that is, in general terms, what you com-
plain of as an unjust discrimination between localites and individ-
uals and an unjust discrimination between east and westbound
freights ; and you complain of the tax imposed upon commerce
to pay interest upon fictitious or watered stock, and you complain
of the depletion of the railroad revenues and the consequent tax-
ation of railroad commerce by subsidiary organizations ; and you
also complain of the proxy system in the present method of elect-
ing the directors of railroads.

Mr. Thukber — Those are, briefly stated, substantially the joints
as presented. There may be one or two other features ; but as we
say in the opening of our statement, we suggest as a beginning the
calling before your Committee the officers of the principal roads,
and asking from them information upon those points.

The Chairman — ^Very well. You named all those subsidiary
corporations which are deemed to exist, did you, in your address ?

Mr. Thurber — Well, sir, we name some of those which have
been brought to our attention ; but we think that the progress,
perhaps, of your investigation may develop others of which we
have no knowledge. The merchants are necessarily at a great dis-
advantage in specifying in detail these matters, as stateed in our
report. The sources of information have been to a very great ex-
tent in the hands of the railroad managers, who have not, of
course, seen fit to put their business before the public in general ;
but we feel that it is necessary that it should be put before your
Committee, and that the facts which are otherwise unattainable
should be arrived at in that manner.

The Chairman — We do not desire, of course, to hear any ex-
tended argument upon this proposition to-day. We wanted a
specific statement of what it was deemed advisable for this Com-
mittee to do by way of investigation. We wanted a specification
of points to be aimed at, and in your recapitulation you have
given those of the Chamber of Commerce. " If there are any other
associations or organizations in the City of New York that have
any points to suggest in addition to those, we shall be very happy
to hear them ; or if there are any parties present representing
3

other organizations who desire to indorse what you have said m
this respect, we shall be pleased to listen to them.

Mr. Thoebee— I believe Mr. Darwin E. James, of the Board of
Trade and Transportation, has a statement.

Mr. Daewin E. James— Mr. Chairman and Gentlemen of the
Committee : Mr. Simon Sterne, .Chairman of this Committee, is
in the City, but he is unwell at the hotel, and unable to be present
to present the statement of the Board of Trade and Transporta-
tion. I am present with members of the Committee, and will read
what we have prepared. Here we have outlined certain lines of
investigation, which I think meet the proposition in your circular.
It is as follows :

ION, [
J. \

The New York Board of Trade and Teanspoetation,

New York, 31arch 24, 1879.

To Hon. A. B. Hepburn,

Chairman of Special Committee on Railroads in the Assembly
of the Slate of Neto York :

Sir, — In conformity wiih your request, we respectfully submit
the following lines of investigation to be pursued by your Com-
mittee in relation to the railway interests of this State.

For the first time since the passage of the General Eailway Act,
in 1850, an opportunity has been offered to investigate both the
benefits conferred by and incidental disadvantages arising from this
great factor of modern civilization. Originally a suppliant for
legislative grants of power, the railway has since that time become,
to a considerable degree, the master of legislation. Evils and
abuses have been developed and accumulated to such a degree
that much of the commercial and financial distress, and the con-
tinuing depreciation of real estate in New York, is laid at the door
of our great transportation routes.

The letter addressed by yoii to our President was submitted, at
a meeting of the Board of Directors, and the undersigned were
appointed a Committee, with powers to prepare an answer, and
submit such suggestions as your letter invites.

We therefore respectfully recommend that your Committee's in-
quiry be directed :

1. To the history of railroad legislation in this State, showing
the gradual abandonment of State supervision ;

2. The causes for such abandonment, and the consequences that
have flown therefrom ;

3. The proper relation of the railroad system to the public ;

4. Are railroads public highways, and if so, are the principles
that govern highways applicable to them ?

5. What has been the cost of the construction of our railroads ?

6. What monetary aid have our railroads received from State,
County and City funds ?

7. How far does the capital stock and bonded indebtedness of
such railroads represent the cost of construction ?

8. If the capital stock and bonded indebtedness of the railroads
do not represent such cost of construction, what consequences, if
any, of an injurious character, result therefrom to the community?

9. What analogy do railroad transportation charges bear to
taxes ; have they not the same effect ?

10. How far do discriminating railroad transportation charges
affect commercial transactions ?

11. To what extent are railroad directors interested in contracts
with their own trusts ?

12. How far is the interest of the public consulted, if at all, in
the classification and establishing of rates and the framing of
tariffs, and with what degree of consistency are such tariffs main-
tained ?

13. What especial immunity or exemptions from tariff rates are
granted to favored individuals in certain localities throughout the
State to the detriment of other members of the same community.
In other words, are special preferences shown, independent of
classes of shipment, in favor of certain individuals ?

14. Are not, as a whole, the inhabitants of the State of New
York discriminated against by tariff rates, and do citizens of other
States obtain the services of railroads chartered by this State at
less rates than citizens of our own State ?

15. Is the great commercial port of New York, upon the pros-
perity of which the well-being of the State, to a considerable de-
gree, depends, discriminated against by railroads chartered by
this State, so that commerce is diverted to other cities and to other
ports in other States ?

16. Does the law of competition apply to the railroad system,
and if not, why not ?

17. What is meant by " pooling," and why do railroads " pool "
their earnings, and in so pooling do not the raih-oads of this State
enter into unlawful combinations against the interests of the citi-
zens of this State ?

18. How do the rates charged by the New York trunk lines, to
and from New York, compare with the rates that are charged to and

from other cities, and are such rates fair ones, taking into consid-
eration the amount of the through traflSc, of the local traffic, and
the superior gradients of the New York railroads ?

19. What is the nature and proper basis for railroad charges
for transportation ?

20. Upon what system should such charges be computed, and is
it possible for the State to devise some scheme by which, upon
such basis, a maximum charge for railroad transportation can be
limited ?

21. Under what circumstances has consolidation of railroads
taken place, and in such consolidation has not a large amount of
fictitious capital been created to earn dividends upon, for which
the community is taxed, and the last and only safeguard in the
law of ten per cent, limitation of dividends has been thereby
eyaded ?

22. What discriminations are made, if any, against New York
(vity as to ocean freight rates, combined with railroad rates ?

23. What becomes of imclaimed dividends in our railroads ?

24. The difference between summer and winter rates, and upon
what do tliey depend, and how far do they depend upon canal
competition ?

25. What is the method of keeping railroad accounts? Are
those accounts truthfully kept, and do the reports annually fur-
nished to the State Engineer, and printed by him, exhibit the true
condition of our railroad system ?

20. Is there any method by which the State can acquire owner-
ship of the railroads ?

27. Have any of the evils which are connected with the railroad
management of this State manifested themselves elsewhere, either
in other States or countries ; and, if so, by what legislation, if any,
have they been remedied?

28. What has been the general policy of governments and peo-
ple in relation to their railroads in other States and countries ?

This Committee respectfully suggests that the railroad history
of this State of the past thirty years will abundantly prove that
some one form of abuse or another will be found to have crept
into oiir railroad management under every one of the heads of in-
vestigation to which we have respectfully drawn your attention.

In the granting of powers, particularly the exercise of the sove-
reign right of eminent domain, the State has seen fit to regard the
railroads as a public enterprise, and to be treated as performing a
public function, but, as to asserting power over it, the State has

treated the railroads, as a private enterprise, less subject to super-
vision than the business of insurance or of banking, and as little
the subject of supervision as the selling of dry goods or boots
and shoes.

From this arises the anomaly that the vast interest which re-
ceives from the citizens of the State of New York many times as
much, in the way of tolls, than the State, Ccunty and municipal
organizations receive in the way of taxes, is unlimited as to the
power of exacting toU, is emancipated from State supervision, and
that the numberless abuses which have crept in are but the natu-
ral result of that element of human nature which induces corpora-
tions, as well as individuals, to exploit to the uttermost the ad-
vantages of a situation which grows out of the apathy of the pub-
lic, and faithlessness and remissness of public oflBeers.

This Committee feels that it may with truth say, and that, in
so saying, it represents the whole body of its constituents, both
directors and members, that it has no quarrel with the individual
managers of any railway of this State, but that it deprecates the
continuance of a system which places in the control of any cor-
poration, however well managed, the sole power to determine,
without representing the public, as to whether the City of New
York, and, through it, the State of New York, shall prosper, and
to what degree that prosperity shall be shared by or divided be-
tween the railway corporations and the rest of the citizens.

The Committee will be pleased to aid your Committee in your
investigations, by offering testimony under every head which tbey
have suggested ; or, if called upon, with more detail and definite-
ness, to specify lines of inquiiy which will enable the Committee
to arrive at a conclusion both as to the benefits conferred and the
evils wrought by our railway system, and how, in the future, whilst
preserving the benefits of the modern system of railway transpor-
tation, to eliminate the mischiefs.

Simon. Steene,

A. B. MiLLEE,

B. P. Bakee,

H. K. MiLLEE,

Darwin E. James,
John F. Heney.

Mr. Jackson S. Schcltz — Mr. Chairman, that closes the in-
dictment that we have framed against the railroad system of this
State. We do not want to be held strictly, as the lawyers would

20 .

hold us, to the esact limit of that indictment. If there is any
count left out of the indictment, I suppose jou will be generous
enough to allow us to submit proof beyond the points. Perhaps
the desire to coyer all the points has made us a little profuse in
our statements, but, I think, when you come to hear us on the
trial — because that is what we are going into — we shall be able to
maintain not only the general principles here stated, but in such
detail as will bring the blush, I think, to the railroad management
of this State. If we fail to show that hundreds of men have been
ruined, absolutely jBnancially ruined, by the policy which has been
pursued by the railroads, we shall come short of what we expect.
It is the first time we have ever had the opportunity of investi-
gating the railroad system of this State, and the railroad manage-
ment of this State. I want to repeat, what our papers very fully
state, that we have no personal feeling. They have got, undoubt-
edly, a very difficult task to perform to compete with railroads
not under the control of this State. I think, before you get
through with this inquiry, you will assume that it is the duty of
the Legislature of this State to protect its citizens against its
own public corporations.

Mr. George W. Lane— Mr. Chairman : — I would say, with no
desire to multiply testimony, but as I was present at the meeting
when the communication from the Chamber of Cf)mmerce was
adopted, that the Importers and Grocers Board of Trade, which I
represent, adopt that statement. I would say, what has been
omitted, that there has been a disposition on the part of the
Board of Trade to endeavor to come to a private understanding
with the officers of the railroads, but they have not succeeded ;
on the contrary, they think that all the promises that were made
have been broken, and, therefore, we appeal to you to investigate
the subject and see whether we were right, or whether the rail-
roads are right in the steps that they have taken.

The Chaieman — The circular to which I called attention at the
opening of the session of the Committee was quite widely circu-
lated, and if there are gentlemen present from any portion of the
State who have suggestions to make, not covered by those already
made, we shall be glad to hear from them ; or if any parties here
desire to indorse those already made we shall be very glad to hear
from them.

Mr. Geoege B. Sloan — Mr. Chairman and Gentlemen of the
Committee : — I received a communication this morning from the
Board of Trade of the City of Oswego, addressed to the Chairman

of this Committee, in response to a communication received from
him — a communication, I suppose, similar to the one addressed to
the various business organizations in different parts of the State.
Inasmuch as the gentlemen who have spoken thus far represent
the sentiment which believes that unjiist discriminations are made
against the City of New York, and its merchants it seemed to me
proper that I should present this communication as indicating the
feeling in other parts of the State, and especially in the City of
Oswego, as expressed through its Board of Trade. If the Com-
mittee will bear with me a moment I will read it. As the communi-
cation of the Chairman of the Committee to the different Boards
of Trade indicated that short and concise replies were desirable,
this is vvritten in that form, and it will take but a moment to
read it :

BOAKD OF TeADE EoOMS, (

Oswego, N. Y., March 25th, 1879. S
Hon. A. B. Hepburn,

ChairiiKui Speckd Committee on Railroads,

Assembly Chamher, Albany, N. Y.:

Deae Sie, — Your favor of the 20th inst. to the President of this
Board of Trade was duly received, and the same was referred to
the Committee on Transportation, and that Committee now beg
leave to reply to the same.

It is a matter of congratulation to the people of the State of
New York tbat the Legislature has now taken hold of this matter
of railroad freights.

The damage and loss to the business men of this State, caused
by the railroads carrying western freight to eastern markets at a
less rate than is charged shippers in tliis State, cannot be accurately
computed by figures, but it cannot be less than five to eight mil-
lions of dollars annually.

The milling interest of this State has been nearly, if not quite,
destroyed by this discrimination in favor of western shipments.

To show how unjust the present freight rates are we refer to the
present open freight rate on a barrel of flour, Milwaukee to Albany,
which is 30 cents ; from Oswego to Albany it is 25 cents ; the dis-
tance from Milwaukee to Albany is 921 miles ; from Oswego to
Albany it is 183 miles. Taking the rate from Oswego as the basis,
the rate from Milwaukee should be $1.25 a barrel instead of 30
cents ; and taking the rate from Milwaukee as the basis, the rate
from Oswego should be five cents a barrel instead of 25 cents.

If this state of things is to continue it is absolutely certain that

the agricultural and manufacturing interests of this State will be
destroyed, and there is no interest in the State but is injuriously
affected by it — not even excepting the railroads themselves. The
stockholders in most of them can tell of valueless investments.

It is clearly for the interest of all that the Legislature should
promptly regulate this great and growing evU.

Much more might be said, but you have asked for short com-
munications. May we ask you for short delay in giving to the
people the necessary legislation to protect their rights ?

O. H. Hastings,

Ghairman.

I will simply say, Mr. Chairman, in connectian with this communi-
cation, that this Committee of the Board of Trade of Oswego, and the
interests they represent, will be very happy if it shall be practicable,
under the plan adopted by the Committee for pursuing its investi-
gation, to have an opportunity to lay before this Committee the
grievances of which they complain more in detail than this com-
munication indicates. I will say, as regards the particular dis-
criminations referred to here, that I suppose the discriminations
upon the article of flour may be said to fairly illustrate the dis-
criminatidus in regard to almost all articles manufactured in the
interior and western parts of this State, which seek an outlet in
eastern markets. The price mentioned here as the freight upon a
barrel of flour— twenty-five cents from Oswego to Albany, and
from Milwaukee, in the State of Wisconsin, to Albany, 30 cents —
tells its own story. The millers of Oswego, as well as the millers
of many other points in this State, rely upon the western markets
for their wheat out of which to manufacture their flour. The
transportation of the wheat from which a barrel of flour is made
to the city of Oswego, from the port of Milwaukee, or any port in
the State of Wisconsin, would ordinarily be equal at least to thirty
or forty cents a barrel. It ynW be readily seen that with twenty-
five cents freight fi'om Oswego and thirty cents freight from Mil-
waukee, the Milwaukee miller, or the miller anywhere in the State
of Wisconsin, has an advantage upon the start which amounts to
giving him a profitable business, while the miller in this State is
entirely excluded from the market so far as any profit upon the
transaction is concerned. Whether it is in the power of this Com-
mittee or in the power of the Legislature to apply a remedy, there
is this fact staring these men in the face : and to many of the
manufacturers in this State, if it is to continue, if there is to be no

remedy, it means an entire loss of all the money invested in this
kind of property, and a complete annihilation of the business. Of
course it is not necessary to impress upon the Committee the
importance of some action being taken, if they can find some prac-
ticable way to bring about a remedy. That this state of things
exists needs no argument from me or from anybody else ; it is
apparent to every one who is at all observant of the course of
trade and of business.

Mr. J. A. Hinds, of Eochester, representing the New York
State Millers' Association, read the following statement :

Eochester, March 22, 1870.

To Special VominHtee on Railroads, Hon. A. B. Hepburn, Ghairinan :

Gentlemen, — We have in our possession vouchers showing very
heavy and unjust discrimination against milling, the largest mauu-
facturing interest in the State of New York :

Present open rate, all rail, Milwaukee to Eochester, per 100 lbs.,
is 23 cents.

Present open rate, all rail, Eochester to New York, per 100 lbs.,
15 cents =38 cents.

Present open rate, all rail, Milwaukee to New York, per 100
lbs., 20 cents.

Discrimination against Eochester milling in transit, per 100 lbs.,
18 cents.

For example :

Car wheat of 24,000 lbs., Milwaukee to Eochester, at 23 cents
per 100 lbs., $55.20.

Car wheat or flour, same weight, Eochester to New York, 15
cents per 100 lbs., .136.00 =$91.20.

Car wheat, same weight, Milwaukee to New York, at 20 cents
per 100 lbs., $48.00.

Discrimination against Eochester on a single car bought in Mil-
waukee and milled, in transit, $43.20.

Present open rate from Toledo to Eochester, per 100 lbs., 14
cents.

Present open rate from Eochester to New York, per 100 lbs., 15
cents=29 cents.

Present open rate from Toledo to New York, per 100 lbs., 19

cents.

Discrimination against Eochester milling in transit, per 100 lbs.,

10 cents.
4

The discrimination on a car of 24,000 lbs. shipped from Toledo
on above rates and milled in Eochester, in transit, is $24.00.

Special reference is had to the vouchers and circulars in proof
of the figures made.

Present rates via Erie road from Eochester to New York, per
bbl., is 30 cents. Present rates via Erie road from Eochester to
Port Jervis, something over half way to New York, 40 cents per
bbl. Current reported rates from Chicago or Milwaukee to Port
Jervis is 40 cents per bbl. Current reported rates from Toledo,
Akron and Cleveland, Ohio, to Port Jei-vis, 40 cents per bbl.

In February, 1878, rates on flour from St. Louis to New York
was 20 cents 'per bbl. ; Erie road's pro rata of that was 7yVu cents
per bbl. from Buffalo to New York. At the same time rates from
Eochester was 30 to 35 cents per bbl. (Refer to J. E. Kimball,
Lape & Eichardson and Flack & Son, Troy, N. Y. ; Eeynolds &
Co., Poughkeepsie, for rates from St. Louis during that period.)
In May, 1878, rates on flour from Chicago and Milwaukee, lake
and rail, to New York, was 80 cents per bbl. During the same
time rates from Buffalo was 30 cents per bbl. The -reported 'pro rata
proportion to the railroads was 53 per cent., which gave the rail-
roads about 16 cents per bbl. taking the flour from the dock, while
30 cents was charged Buffalo millers who generally loaded their
own cars. Eates fiom Eochester to New York was only 5 cents
per bbl. less than Buffalo during the same time.

The capacity of the mills in Eochester is 700 to 800,000 bbls.
annually, and can run full time with reasonable pro rata rates.
Buffalo capacity about the same, and Oswego probably more. I
have no reasonable data to estimate the full milling capacity of
the State, but good judges believe it to be very much larger than
any other manufacturing interest in the State. Under the present
disastrous discriminations the mills cannot be run but very little
above one-third their full capacity, and that at no profit. Prioi'
to the last two or three years all mills in this city were run on
practically full time ; none of them are now. The depreciation of
milling real estate is fearful. The iron interest in Eochester dur-
ing the same period has suffered immensely. Good judges esti-
mate it not one-fifth what it was four or five years since, nearly all
attributable to unfavorable freights. The clothing, boot and shoe
furniture, nurserymen, brewers and mercantile interest, all which
are represented in our late circular, make similar complaints. It
would seem the great State of New York should not allow the
doors of her extensive manufacturing industries to be closed, and

the real estate made comparatively worthless, aud all other inter-
ests correspondingly depressed bj the unjnst discrimination of
railroads within her borders, to whom she has granted the most
valuable franchises on the American continent.

EespectfuUy,

J. A. Hinds,
Sec. and Treas. N. Y. Sfntc Millers' Associntlon.

The Chairman — Are there any other gentlemen present desiring
to be heard ?

Mr. Thomas J. Tuttle— Mr. Chairman and Gentlemen of the
Committee, I came here at very short notice, aud, therefore am
not prepared with any written document, and being no orator,
cannot give you a very flowery speech. I am from Orange County,
and I am here more particularly to call your attention to the abuses
that we deem are practised upon us in the discrimination of freight
upon milk. Milk averaged in New York City, for the year 1878,
about $1.05 a can returned to the producer. The fi-eight chai'ged
upon that same can of milk has been fifty-five cents delivered in
Jersey City, the ferriage yet to be added.

Mr. HuSTED — That is not before our Comu^ittee. That is before
the Legislature now in a separate bill.

Mr. Wadsworth — This is one of the discriminations.

Mr. TuTTLE — There is a bill before the House bearing upon
this matter.

The Chairman — I have here a communication from N. B. Kill-
mer. President of the Kings County Milk Exchange, reciting at
length certain specifications. Perhaps, if that goes upon the tiles
of the Committee, and is printed, it will cover your point.

Mr. Tuttle — Probably it Avill, to a very great extent. I pre-
sume it will. But the railroad companies may say to you, it is
the dealers' interest wholly there, as Mr. Killmer is a dealer. I
represent the interests of the producers in Orange County.

The Chairman — We will hear yon.

Mr. TuLTLE — This mOk is carried a distance of from fifty to
sixty miles. About 110 pounds is the weight of a can of milk,
aud the freight upon it is fifty to fifty-two cents a can, which
shows a higher rate than any other class of freight mentioned even
for longer distances. All I seek to do is to call your attention to
this fact ; and I hope that in making your investigation you will
not forget to investigate this one particular thing amongst the
others.

The ChaikMaN— I call the attention of the Committee to the
fact that I requested parties to whom this circular was addressed,
in case they could not have a representative present in person, to
submit in wiiting a concise statement of alleged abuses. I have
received from the Buffalo Board of Trade two communications
which go on to recite in detail discriminations which exist against
that city. They are of a character very similar to those detailed
by gentlemen who have already spoken.

The Chairman presented a communication from the Buffalo
Board of Trade, signed by William Thurstone, Secretary, which is
as follows :

Buffalo Board of Trade, )
Buffalo, N. Y., March 25th, 1879. j

Hon. A. B. Hepburn,

Chairman Special Committee on Eailroads, Albany, N. Y. :
Dear Sir, — In answer to your communication of the 20th March,
1879, and after careful investigation of the subject, the millers,
merchants, and others of this port, have directed me to forward
for your consideration the annexed synopsis of facts, bearing upon
the very important matter which is before your honorable Com-
mittee relative to the " specifications of abuses deemed to exist in
the railroad management of this State."

I beg to subscribe myself yours very faithfully,

William Thurstone,

Secretary.

Buffalo Board of Trade, )
Buffalo, N. Y., Blarch 25th, 1879. j

Statement relative to the " Specifications of Abuses deemed to exist in
the Railroad Blanagemeht of this State."

The discrimination in freights against the State of New York
applies to the rates from all western points and to all products,
thereby affecting every commercial, mannfacluaing and farming
interest to such a degree as to impair the prosperity of the people
of our State.

A law should be passed immediately to demand protection from
tlie present system of unjust discrimination by railroads, and
every farmer, manufacturer, miller and merchant deems that it is
the imperative duty of our legislative bodies to prevent such dis-
criminations.

Statistics prepared with much care, proved that the people of

tills State are losers by tlie discrimination to the large sum of
eight million dollars per annum.

The present tariff rates of freight, by all rail, from Milwaukee
to New York is seventeen cents on wheat per 100 pounds, and
thirty-six cents per barrel on flour; and from Milwaukee to Buf-
falo fifteen cents on wheat per 100 pounds and thirty cents per
barrel on flour.

The tariff rate, by all rail, from Chicago to New York is forty
cents per barrel on flour and twenty cents per 100 pounds on
grain ; the rate from Buffalo to New York is thirty-five cents per
barrel for flour and sixteen cents per 100 pounds on grain.

The rates of railroad freight from Buffalo to Troy and Albany
are twenty-five cents, per barrel for flour, and twelve and a half
cents per 100 pounds for grain.

The rates of railroad freight from Buffalo on flour and grain are
as fdllows :

To Rochester, flour 15 cents per barrel ; grain 7^ cents per
100 pounds.

To Syracuse, Utica, Rome, Amsterdam, flour 25 cents per bar-
rel ; grain 12 J cents per 100 pounds.

It is a well known fact, both here and at other points, that
wheat has been taken by all rail freely at fifteen cents per 100
pounds, and flour at thirty cents per barrel, from Chicago to New
York, and in many cases at less rates.

Chicago circulars state that the regular -rates of freight, all rail,
from that point are fifteen cents to New York, thirteen cents to
Philadelphia, and twelve cents to Baltimore, on grain and pro-
visions per 100 pounds ; whilst the rates from Bufl'alo to Philadel-
phia and Baltimore are the same as from Buffalo to Yew York.

It is a well known fact that fourth class freight has been shipped
by railroads from Chicago to New York, this winter, as low as 11
cents per 100 pounds, whilst Oswego and many other interior
points of this State have had to pay 15 cents and over for delivering
similar products at the same destination. This is manifestly un-
fair to the people of our State that gave the railroads their fran-
chise.

The rate on Monday last for grain, flour, bran and mill-stuffs
from St. Louis, Mo., to New York, was twenty-three cents per 100
pounds, and on fourth class freight twenty-nine cents per 100
pounds.

Fourth class freight (such as pork, for instance), on Saturday
last, all rail, was quoted at twenty-five cents per 100 pounds from

from Chicago to New York. The Buffalo rate was twenty cents
per 100 pounds to Albany, and 16 cents per 100 pounds to Syra-
cuse, with other points at same relative discrimination.

Previous to advancing rates of freight, railroad agents contract
for large quantities of freight ahead, thereby causing considerable
loss to shippers who are not advised of the advance in time to
secure the more favorable schedule of prices. A uniform rate
should be established and made permanent.

A -(n^o rata freight bill should be devised and passed by the
Legislature, so that when Chicago was handling property at, say
twenty cents per 100 pounds freight rate to New York, Buffalo
should not pay more than about ten cents. The Supreme Court
has decided that the Legislalure has the power to restrict the
railroads, therefore, there is no impediment in the way of coming
to some proper and equitable method of adjustment whereby un-
just discrimination may be averted, and exact justice done to all
classes of shippers.

The milling interests of this State are deeply injured by the dis-
crimination in freights ; in all parts can be found mills that are
closed, and others that have been burnt and not rebuilt, as the
owners know by experience that it is an almost hopeless venture to
buy grain and manufacture it into flour and pay the heavy charges
for transportation to the seaboard, and place their product in
competition with that manufactured at western mills, that have
the advantage of the large discrimination in their favor in the
matter of transportation.

Many other industrial ventures have been contemplated at this
point, which would have tended to advance materially the inter-
ests of our State, but have failed to be located here because the
projectors could not make as favorable transportation arrange-
ments at this port for shipment east as were offered them at the
western end of the lakes.

Several large pork-packing establishments started at this point,
have closed up their business during the past few years, and
are considering the propriety of pursuing the same course — the
result of the unjust discrimination of the railroads against Buffalo.
It is quite impossible to compete with rates hence to New York
and eastern points as high as those from the far distant western
points.

A writer in a prominent journal, under the title of the " King's
Highway," shows the absolute equality of all classes of citizens in
highway rights before the introduction of railroads ; and says :

" The value of an article is what it will bring at the point of con-
" sumption, and if a bushel of corn is worth a certain price in
" New York, the producer reahzes that amount, less the charge
" for transportation, and this, as is well known, is by far the
" larger portion of its value. The railroads, therefore, have the
" power absolutely to fix the reward which every man shall re-
" ceive for his labor, and this power is arbitrarily exercised with-
" out regard either to law or justice. The rights of entire
" communities are disregarded; the commerce of one city or town
" is artificially stimulated at the expense of others, and the prin-
" ciple of the ' King's Highway ' is entirely disregarded by favor-
" itism to individuals, which practically makes one man rich at
" at the expense of his neighbor." The great disproportion in
the charges for through and local freight is a direct violation of
the fundamental law of the State, and from this cause arises actual
injury to thousands of individuals and the before mentioned im-
mense annual loss to the State.

Your honorable Committee are recommended to apply to Mr.
Joseph Nimmo, Jr., Biireau of Statistics, Washington, D. C, and
ask him to send you by return post the "the Annual Report of
" the Chief of the Bureau of Statistics, Commerce and Navigation
'■ for 187G, part 2, Internal Commerce and Navigation." You will
find therein reports from 46 (forty-six) experts from all parts of
the United States, appointed by the Government to investigate
railroad matters, and will doubtless derive information of great
alue to your honorable Committee.

Also, the following additional communication from William
Thurstone, Secretary of the Buffalo Board of Trade :

Buffalo Boakd of Teadb, )
Buffalo, N. Y., MarcJi 25th, 1879. j

Hon. A. B. Hepbukn, Assembly Chamber, Albany, N. Y. :

Dear Sir, — At the close of the year 1875 I was appointed an
expert by the Bureau of Statistics at Washington, T>. C, to pre-
pare statements relative to the commerce of Buffalo, and, among
other questions, was the following, which has reference to the
subject now before your Committee on Railroads.

" No. 3. Please to mention railroad rates which operate in such
" manner as to discriminate against the commercial interests of
"Buffalo?"

For the information of your Committee I append herewith my
answers to the question, hoping they will interest you.

Respectfully,

Tours faithfully,

William Thubstone.

Question No. 3. Please to mention railroad rates which operate in
S2ich manner as to discriminate against the commercial interests of
Buffab ?

ANSWERS.

No. 1. Average discrimination against Buffalo, on flour, from 10
to 25 cents per barrel, during the year 1875.' This in regard to
shipments to seabord direct from Milwaukee and points adjoining,
and where it was shipped to Buffalo and then ordered reshipped
again to the seaboard.

No. 2. During 1875, the freight on grain from Toledo averaged
25 cents per 100 pounds to Pennsylvania and New York points
that take New York rates. During the same period freight from
Buffalo was at the same rate to these points, making a discrimi-
nation against Biffalo, on total freight from Toledo to Buffalo, of
13 cents per 100 pounds.

No. 3. During the summer of 1875, grain could be shipped from
Buffalo to AUentown, Bethlehem and Catasauqua, in Pennsylva-
nia, at 25 cents per 100 pounds. From Detroit to same places, 20
cents per 100 pounds. Discrimination against Buffalo of total
freight from Detroit to Buffalo of 10 cents per 100 pounds and five
cents in the rate, making 15 cents per 100 pounds in all.

No. 4. During early winter of 1875, rates were 36 cents per 100
pounds from Indianapolis to Portland, Maine, and to Portland
points. Rates from Buffalo to Portland and Portland points were
30 cents per 100 pounds, making a discrimination against Buffalo
of total rate from Indianapolis to Buffalo of 20 cents per 100
pounds.

No. 5. Some years since a large trade was transacted by our
Buffalo merchants with dealers in eastern States, as well as in
eastern New York and southern and eastern Pennsylvania.
Through discrimination in railroad freights, the trade has been
diverted to tvestern points of distribution, virtually making Buffalo a
way station.

No. 6. Grain has been shipped from Chicago to New York
during 1875, at times, for 25 cents per 100 pounds ; rate from
Chicago to Buffalo 20 cents, and 13 cents from Buffalo to New

York ; total, 33 cents per 100 pounds ; a discrimination of 8 cents
per 100 pounds against Buffalo. These examples might be con-
tinued.

No. 7. Merely illustrative of competing railroads.

No. 8. A miller at Medina, N. Y., can buy No. 1 wheat at Mil-
waukee, say for $1.30 per bushel laid down at his mill in Medina.
He comes to Buffalo and finds the dealer there cannot sell him
the same quality of wheat at less than $1.30 per bushel after the
paying of charges of freighting from Milwaukee to that port. The
freight charges from 'Buffalo to Medina are about 4 cents per
bushel, tJie rate of discrimination agaimt tJie former place.

No. 9. A miller at Binghamton.N. Y., was in the habit of com-
ing to Buffalo and buying from 45,000 to 50,000 bushels of corn
annually, during several winters. He does not come to Buffalo
now, for he finds that by purchasing at Lafayette, Indiana, he
saves from 3 to 4 cents per bushel, the railroads discriminating
against Buffalo to that amount affreight.

No. 10. A merchant came here last fall to buy cheese made in
this section of New York. He found that he could make more
money by going to New York and purchasing the same brand of
cheese there. The reason was that he could obtain lower rates of
freight from New York to Milwaukee than he could firom the point
of manufacture to Buffalo and thence to Milwaukee.

No. 11. Parties can buy grain at way stations on the western
railroad lines and ship to points in New York and Pennsylvania,
etc., etc., at a less cost than by coming to Buffalo. This discrimin-
ates against this port, for the rates from here to these same places
are from i^ to 3 cents per 100 pounds higher, relatively.

No. 12. Coal has been and is now being shipped from Syracuse,
N. Y., to western points, say Chicago, for illustration, as cheaply
as from Buffalo to said points ; discrimination against this port of
the rate of freight on coal from Syracuse to Buffalo.

Also, a communication from the Onondaga Farmers' Club, which
is as follows :

EOOMS OF THE FaKMBRs' ClUB OF OnONDAGA, )

Syracuse, March 25, 1579. j

Hon. A. B. Hepburn,

Chairman Special Committee on Railroads, etc., Albany, N. Y. :

Sir, — Your communication to the President of this club inviting
bis attendance before your Committee on the 26th inst., or if he
5

could not be present, to communicate in writing on the subject of
abuses deemed to exist in railroad management in this State, was,
at a late meeting of the club, referred to the undersigned Special
Committee to be answered.

We complain of the unjust discrimination made by the New
York Central & Hudson Eiver Eailroad Company in its rates of
freight by which shippers along the line of its road are placed at
a great disadvantage as compared with those who ship their
freights at or from beyond its termini.

Eaihoad corporations are creatures of the State. They hold
their franchises by virtue of its laws, and theoretically are sup-
posed to confer upon the people of the State some benefits in re-
turn. When, therefore, their management operates to the injury
of the people of this State, by giving to those who live beyond its
boundaries advantages over them, equal in many cases to the
profits of the business in which they are engaged, and for which
they are perhaps competitors, the evil becomes one which certainly
demands corrective legislation.

The fact that these discriminations are made is not denied by
the railroad company, which justifies its action, and is as well
known to the members of joav Committee, as it is to all intelligent
men, who have given to the matter the least attention.

There beiug then no dispute as to the facts, the question which
presents itself is, whether the State shall any longer permit a cor-
poration of its own creation to continue a practice which operates
so unjustly and so injuriously to the interests of its citizens.

We ask you, therefore, to recommend and aid in the legislation
for correcting the evil.

Very respectfully yours,

E. A. Powell,
G. C. Feeeis,
D. P. Phelps,

Committee.

Also, specifications signed by N. B. Killmer, to which reference
has been made heretofore.

The communication is addressed to Hon. A. B. Hepburn,
Chairman of the Special Committee on Railroads, and is as follows :

Charges preferred against the several railroads of the State that
carry milk for the purpose of being delivered in the Cities of New
York and Brooklyn.

SPECIFICATIONS.

1. Their making a special class for milk, and charging 60 cents
per can as freight, or twice as much per hundred for it as charged
for first class freight shipped from the same station.

2. Their charging 55 cents per hundred as freight on milk, and
charging for other articles of produce and jnerchandise, that, by
reason of the weight and least bulk, should be rated iti the same
class, only 11 cents per hundred from the same station.

3. Their carrying each and every other article raised by the
milk producer that is sent to New York City in car loads, at from
$20 to $30 per car, and compelhng him to pay at the rate of $120
per car for carrying his milk.

4. The Hudson River Raih-oad Company carry hay during boat
navigation in car loads at the rate of $1 per ton, and charge from
the same station $10 per ton for milk.

5. They will all carry first class freight that, by reason of its be-
ing very light and bulky, a car could not contain over half the
amount in weight a car of milk would, at $28 per car, and yet
charge for milk from $100 to $150 per car.

6. They will carry any and all kinds of freight from Bufi'alo, a
distance of 423 miles, or from the farthest point in the State to
New York City, for a much less rate per hundred for a single
package than milk pays them in car loads shipped only one-tenth
the distance.

7. They will carry iron from Albany to New York for 7 cents
per hundred, and milk shipped one-third the distance pays about
eight times as much.

8. They will run a Pullman palace car filled with passengers for
the same distance they carry the milk, at less than half the price
they receive for a car of milk.

9. On some of the roads they run in connection with the milk
train a passenger car that goes far towards paying the expenses
of the train, and that is not used upon other freight trains that
carry freight at one-fifth the price milk pays them.

10. The express companies who run their cars over the same
railroad lines have taken the milk at 40 cents per can, and deliv-
ered at the dealer's door in the City, and not left at the station,
and only ceased to do so when compelled to by these railroad
companies.

l^ 11. AI the present price paid the railroad companies, they re-
t ceive as freight on milk about $30 for every $ I expended in run-
*ning the milk train.

12. The milk was freighted previous to the war at 15 and 20
cents per can, and advanced to the present high figure in 1864, or
during the high price of labor, fuel, etc. The cause for the ad-
vance has been removed, and the war price continued until the
present time.

13. The price for carrying all other freight reduced (as, for in-
stance, hay cars on the Harlem Koad that formerly cost $35 now
reduced to $20), and milk continued at the same high rate.

14. Instead of its being more expensive for the railroads to han-
dle, and therefore save excuse for the higher rates than charged
for other things, we claim and can prove it really costs them less
than most anything else they carry.

15. A receipt given for all other freight carried by them, but
milk an exception to the rule, and the dealer left to the mercy of
dishonest producers and brakemen.

THE REMEDY.

I would suggest that if the above charges are found to be true,
that you would recommend the passage of a bill by the State Leg-
islature limiting them to a rate of charges in proportion to other
articles of produce and merchandise carried by them, similar to
the one now before the Legislature, if that does not in the mean-
time become a law before you, gentlemen, have the honor to re-
port the result of your investigation.

Yours truly,

N. B. KiLLMEE.

Also the following communication :

New Yoek Peoddce Exchange, )
New Yoek, March 26, 1879. j

Hon. A. B. Hepbden, Chairman Special Committee on Railroads,
Assemhly Chamber, Albany :

Dear Sir, — Your valued communication of the 20th inst., re-
questing me to appear before your Committee on the 26th inst.,
for the purpose of making specifications of the abuses deemed to
exist in railroad management in this State, and to suggest to your
Committee such line of investigation as in my judgment is best
calculated to expose such alleged abuses, and put your Copimittee
in position to suggest proper remedies therefor, came duly to hand
and has received the careful consideration of the Board of Man-
agers of this Exchange.

There is, doubtless, no class of merchants -within the State who
are more familiar with the fact that grave abuses exist in railroad
management than the merchants of this Exchange ; but, while we
are aware of this fact and, in many cases, acquainted also with the
nature of such abuses, we are not at present prepared to make
specifications which would probably have a tendency to put your
Committee in a position to even suggest proper remedies therefor.

I may be permitted to say, however, that while the members of
this Exchange have for many years past suffered, and are still suf-
fering, injustice at the hands of railroad management, still we are
not enemies of the railroads and should be sorry if any injustice
were done them in the endeavor made to redress such evils.

The Produce Exchange is in favor, as we view it, not so much of
a special committee on railroad matters wliose functions must soon
terminate, but they are in favor of a Railroad Commission which
shall not be transitory in its nature but shall be continuous, as in
the case of Massachusetts — a commission to stand between the
railroad corporations and those whose interests compel them to
use them, with the power to so regulate their affairs that injustice
shall not be done either to the railroad corporations or to those
who are compelled to employ them.

EiCgretting my inability to attend your conference,

I remain very respectfully yours,

FEiNKLIN EdSON,

President.

Mr. E. Ham — Mr. Chairman : I wish to call the attention of the
Committee to one point whicb I do not think was embraced in the
indictment of the gentleman representing Mr. Sterne, and that is
to what extent, if any, any railroad in this State has forfeited its
charter by reason of non-user.

The Chairman — Mr. Easton, of Albany, desires to say a word in
behalf of the lumber interest.

Mr. C. P. Easton — Mr. Chairman : I am engaged in the lumber
business in this city, and have been for thirty years. Most of our
lumber comes here by canal ; we do not use the railroad much ;
but we distribute lumber from this point by railroad. This is the
largest lumber market in the Eastern States, used to be the largest
in the world ; but through the action of the railroads we have lost
our prestige somewhat ; and it is not nearly so large a market at
present. We have an eastern market here. The Boston and
Albany Eailroad, which, in its building, secured the credit of the

City of Albany to the extent of two millions of dollars, seriously
discriminates against our trade in the transportation of lumber.
If I wish to send a car load of lumber fi-om here to Springfield,
one hundred miles, they charge me $30 for it ; if my competitor in
Saginaw "Valley, daring the summer months, wishes to send the
same car of lumber from the Saginaw Valley, a distance of about
750 miles, they will take it for $40. The Central Eoad will take
lumber from Tonawanda, which is a competing point with the
Erie Eoad, for from $25 to $30 to New York ; if I wish to send a
car of lumber from my lumber yard in Albany to New York, a
distance of 150 miles, they will charge me $25 ; of course the City
of Albany is out of the market. We have in Lowell, and Boston,
and Providence, and all those eastern points, a lumber con-
suming community ; a great deal of lumber goes there. I pay $25
a car load now since tbe Hoosac Tunnel line has been opened —
and, by the by, it is cheaper freight than we ever had before — I
pay $25 by the Hoosac Tunnel line to Boston, and they bring the
same car load of lumber during the summer months from Michigan,
850 miles, for $48. To-day, during the winter months, it is some-
what higher. There is a great discrimination against the markets
of this State — against this market — in the transportation of lum-
ber. We are feeling it every day in this State — losing our trade
because of the discrimination against the cities of this State in
favor of the far west, and we think it is unjust. We have helped
to build up these roads and given them business — given them fran-
chises, as the gentleman's paper said, that are very valuable, and
we think it will be just, if the railroads can see any way to do it,
or this Committee, to give us relief in this matter, and give us
some sort of -pro rata. We do not expect the railroads to carry
our property quite as cheap as they do for long distances, but the
discrimination is a sort of embargo on our trade. It shuts us out
of the eastern markets, and we are shut out by the action of our
own organizations, by our own corporations tliat have been organ-
ized in this State. That is aU 1 have to say.

The Chaieman — It is moved that the Committee go into execu-
tive session.

Carried.

Adjourned.

COMMUNICATION.

New York, April 18, 1879.
Hon. A. B. Hepbuen,

ChalriiKin S/x'cial Connuiftee on Ballroads, Albany, N. Y.:

Dear Sir, — The undersigned, respectively. Presidents of the
Boards of Directors of the New York Central & Hudson Eiver
Eailroad, and of the New York, Lake Erie & Western Eailroad
Companies, have been notified that your Honorable Committee
has been appointed under the provisions of the following resolu-
tion of the Assembly of the State of New York, adopted Feb-
ruary 20, 1879 :

" Resolved, That a Special Committee of five (afterward increased
to nine) persons be appointed, with power to send for persons and
papers, and to employ a stenographer, whose duty it shall be to
investigate the abuses alleged to exist in the management of the
railroads chartered by this State, and to inquire into and report
concerning their powers, contracts u,nd obligations ; said Com-
mittee to take testimony in the City of New York and such other
places as they may deem necessary, and to report to the Legis-
lature either at the present or the next session, by bill or other-
wise, what, if any, legislation is necessary to protect and extend
the commercial and industrial interests of the State."

for the purpose of making such inquiries in the premises as you
may deem right and proper — and that an address has been read
before your body from the "Chamber of Commerce of the City of
New York," embodying the grievances under which the trade and
business of the City and State of New York are alleged to be
suffering, due to the peculiar and special management of the two
corporations represented by the undersigned, which corporations
control and influence seventeen hundred and forty-eight (1,748)
miles of the total of fifty-five hundred and sixty-five (5,565) miles
of railway within the limits of the State.

Recognizing at all times the paramount duty of the General
Assembly of the State of New York to investigate " abuses alleged
to exist in the management of the railroads chartered by the

State," and all charges made by responsible parties against the
corporations of any and of all kinds to which the authority of the
State has given existence, and further recognizing that the " Cham-
ber of Commerce" is an institution of the City of New York,
embracing in its membership many of the most influential, intelli-
gent, and wealthy citizens of that City, the undersigned feel it to
be their diity to your Honorable Committee, to their constituents,
and to the citizens of this Commonwealth, to lay before you a clear
statement of the general principles which control the management
of these corporations, and in doing this will find it convenient to
illustrate the same by a consideration of the charges contained in
the above referred to address of the " Chamber of Commerce,"
which address may be accepted as covering all the alleged griev-
ances and causes of injury to the people of the State of New
York arising from railroad management.

Moral responsibility of parties making charges.

It will not be amiss to preface this communication with some
consideration of the moral responsibility of parties lolio assume to
make charges against other persons or parties.

The law will hold every man to a strict accountability for loose
or malicious charges against another, whereby his character or
property may be injured.

The good and safety of society demands such a law for its pro-
tection.

This principle applies as well to the protection of the officers of
railroad corporations and the shareholders thereof, the share-
holders being responsible for the acts of their representatives.
The reckless habit of charging all officers of railway companies
with corruption is not only a bad one, but it directly affects repu-
tations, and injures the property of many innocent people.

When, then, a body like the " Chamber of Commerce of the
City of New York " submits to a Committee of the Assembly of
the State of New York — mainly appointed under their memorial to •
the Legislature — an address like the one referred to, the charges
in such an address assume all the dignity and force of formal ac-
cusations against the management of the New York Central, the
New York, Lake Erie & Western Kailroad, and all other railroads
in the State, and it would be but fair to expect that in such an
indictment the specifications and counts would be clear, direct, and
capable of proof. Charges based upon mere hearsay, supposition,

rumors, would be derogatory to the character of such a body as
the "Chamber of Commerce," and a great wrong and outrage
upon the managers and the shareholders of the different railway
corporations. How far such charges have been substantiated by
proof will be seen by an examination of the same.

The relations iettveen the State and the railroad companies.

Before investigating the charges made and the specifications, it
will be well to consider the relation between the State and the
railroad companies. The introduction of the address plainly in-
dicates that the " Chamber of Commerce " or the Committee do
not understand the nature of the relation between the State and
the railway companies, as will be evident from the following ex-
tract from the address :

" We respectfully call your attention to the fact that the princi-
ple of the ' king's highway,' from the earliest period, has been one
of absolute equality for all classes of citizens, and in the early
English laws pertaining to the organization of society, this princi-
ple is a prominent feature. With the introduction of the improved
highways known as railroads, however, the ownership passed from
the community at large into the hands of capitalists, who, to re-
numerate themselves for the investment, were permitted to charge
certain tolls or rates for transportation. So eager was the public
to avail themselves 6f the enormous advantages of steam that
they granted almost every privilege which the association of indi-
viduals who proposed to construct these improved highways asked
for, and the the result has been that the great blessing has been
accompanied with attendant evils which are now crying loudly for
remedy."

The writers of the above, in their reference to the " king's high-
way," have evidently forgotten the facts —

That it is the primary duty of the State to furnish " highways,"
whether they be the road, the canal, the turnpike, or the railroad,
the State alone having the right of " eminent domain."

That this duty has been complied with by the State in most of
these ways.

That, for prudential and other reasons, the State of New York
preferred to engage the services and capital of her citizens to do
what was her duty to do, granting them certain powers under cer-
tain limitations and restrictions, which are made part of the con-
tract between these " citizens " and the State.

The State places such " citizens " in her place to perform her
6

duties, and for this purpose clothes them with the imperial right of
" eminent domain," so far as may be required to perform the duty-
devolving upon them.

Such " citizens " so placed have a right to the fullest protection
of the State, and to be protected against any laws that the State
would not paas if such property of " citizens " had been built by
the State itself, and further, such " citizens " should be protected
against any legislation that would lessen the value of property so
obtained by its " citizens " by reason of their contract with and
their willingness to take the place of the State in the performance
of one of its highest duties.

The railway company thus holds, in its relation to the State :

1st. Its position as a substitute for the State under the powers
and limitations of the law ; and

2d. The right of pecuniary recompense and of ample protection
of property.

The writers of the address look upon the railway company as for
pecuniary profit only and ignore their position as created to per-
form the duty of the State, taking the risks of investments, of
management, etc., upon themselves. The railway companies thus
have a higher claim than the ordinary . corporation can have upon
the State.

The ordinary corporation is organized for the special pecuniary
profit of its shareholders, the profit of the public being secondary.
The railway corporation is organized primarily for the benefit of
the people of the State, and the pecuniary consideration is second-
ary, but necessary to induce [the citizens of the State to assume
the performance of the duty of the State. This assertion is true,
and is in the essence of the grant by the State of its powers. Cer-
tainly the State would not grant the right of the use of one of its
highest powers, viz., of "^eminent domain," if the advantages to the
State were to be secondary, and the results of the building of rail-
ways proves this, as could be shown by statistics in the increase
in the value of property and of population in the State.

The profit to the State from the building of railways has been
vastly greater than any and all the profits received by the share-
holders from dividends on stock.

The citizens building the railroads have thus a strong claim to
all the profits that may come to them under their contract with the
State. This contract cannot be violated by the State.

The charges made in address.
The subjoined extract from the address covers the charges made
by the " Chamber of Commerce," to be followed by the specifica-
tions :

" While the improved highways were in their infancy these evils
were hardly apparent, but by the combination and consolidation
of the small and weak companies they have grown into enormous
organizations, controlling absolutely the production and com-
merce of whole sections of country, dictating values to producers,
manufacturers, merchants and consumers. The value of an article
is what it will bring at the point of consumption, and if a bushel
of corn is worth a certain price in New York, the producer realizes
that amount, less the charge for transportation, and this, as is well
known, in many instances is by far the larger portion of its value.

" The railroads, therefore, have the power absolutely to fix the
reward which every man shall receive for his labor, and it is prob-
able that your investigation will show that this power is arbitrar-
ily exercised ; that the rights of entire communities are disre-
garded ; the commerce of one city or town artificially stimulated
at the expense of others, and the principle of ' the public highway '
entirely disregarded by favoritism to individuals, which practically
makes one man rich at the expense of his neighbors.

" It may be found upon investigation that some of these charges
are, in whole or in part, unfounded, for the principal sources of
information have been in the possession of the railroads, and care-
fully-kept from the knowledge of the pubMc. We shall be only
too glad^if this should prove to be the case, but the vigorous op-
position of railroad managers to all investigation and supervision
tends to confirm fair-minded men in the opinion of its necessity.
It has been reported to us that persons in the interest of the rail-
roads had spoken of our efforts as a communistic movement against
capital invested in railroads. We believe that such an absurd
charge will react upon those who give it currency, for the record of
the Chamber of Commerce is such that it can never be accused of
making unjust war upon any interest ; but your Committee believe
that the time is at hand when, if the railroads chartered by this
State refuse to do justice to the public, the merchants and real
estate owners of New York City must join hands with the produc-
ing, manufacturing and mercantile interests throughout the State
in an effort to compel them to do so.

" With your permission we will now present seriatim the com-
plaints before alluded to, and ask that they be investigated by re-
quiring the officers and agents of the New York Central & Hud-
son Eiver Eailroad, the New York, Lake Erie & Western Eail-
road, and of such other roads as may seem necessary, to appear
before you and testify in regard to the matters concerned ; also,
that such other persons be summoned as may be peoessary to
thoroughly elucidate the subject under consideration."^

The charges, in the above quotation, lack that fairness which
should characterize such, a body. The address frequently falls
back upon an " if," and as if in consciousness of the falsity of the
specification to follow, prepares for the event of such charges be-
ing proven false, by attributing the cause of such failure to the
railroad companies keeping from the public the necessary facts on
which a correct opinion could be formed, and this opens the ques-
tion, vrhich it is well to determine, viz. :

Prober limit to legislative inquiry of railroad management.

How far the people are entitled to know the details of railroad
operations, or how much of the detail of railroad operations and
management should the Legislature require the railroad companies
to publish.

The charges, as above made, are that :

" The principal sources ot information are in the possession of
the railroads, and have been carefully kept from the knowledge of
the public ; " and that

" The vigorous opposition of railroad managers to all investiga-
tion and supervision tends to confirm fair-minded men in the opin-
ion of its necessity ; " that is of this investigation.

The first question is : Who has the right to ask questions of a
railway company, and to whom are they bound to make stnswer .''

Has Mr. Thurber, Mr. Schultz, Mr. James, Mr. Lane, or Mr.
Anybody else the right to go to a railroad company's office and
demand such information as he may please to ask for? Do either
of these parties represent the public, the people, or the State ?

The State is the only representative of the people, and the State
has a right to any information which does not interfere with the
chartered rights it has given.

If, then, the State is the proper party to interrogate the railroad
companies, and by asking for this Committee the representatives
of the " Chamber of Commerce" acknowledge it, the simple in-
quiry remains :

Have the railway companies ever refused to give any informa-
tion asked for by the Legislature?

The answer is : They have not, and the first assertion in the
address as quoted is untrue.

The second extract is a piece of cool assumption, and is equally
untrue — -there is no opposition on the part of railroad managers to
any legal investigation or proper supervision.

These two extracts from the address are an evidence of the
recklessness with which charges may be made that are utterly
destitute of truth, and which have a direct tendency to injure the
reputation of the managers of the railway company, and to seri-
ously affect the value of the property of the shareholders.

The peculiar relation of railway corporations, already alluded
to, toward the State, and, therefore, the people, and the peculiar
character of their operations being so intimately connected with
the growth and development of the State, makes a railway in a
strong sense a public corporation — as such purely, the State would
have every right to thoroughly examine and cause to be published
every transaction of such a company ; to publish the proceedings
of its Board of Directors, the contracts made, etc., etc. But while
the railroads bear to the public this character of a public corpora-
tion, they are also private corporations, and their owners have all
the rights that appertain to such.

It is not necessary to discuss in detail what their rights are —
enough, that they can only, so far as the secrecy of their opera-
tions is concerned, be called upon to expose any of their proceed-
ings in a suit at law under order of a court, or when charges are
made of violation of charter, to ascertain by proper proceedings if
such charges are true.

The answers to the questions embraced in the annual reports to
the State Engineer cover the principal points in which the people
have an interest. So far it is right and proper. The railroad
companies are willing and even proffer such information to the
people. This information is really required, that the legislators
of the people may be able intelligently to act in all matters affect-
ing the interest of the State and of the railroads themselves —
further the State should not go, unless in the case of charges,
when the Legislature may make preliminary examinations, to be
followed, if required, by the Attorney-General of the State adopt-
ing legal proceedings. The State is largely protected, in the ab-
sence of detailed examination or answers to questions, by the
interests of the shareholders in the railroad corporations. It is
not their interest to have their charters forfeited or their proper-
ties badly managed, and in most of the corporations of the State
the managers in addition to the report to the State Engineer,
make a more full and detailed report to the shareholders.

If these views are correct, it heightens the responsibility of par-
ties in making such charges against any corporation ; and for the

protection of private rights, it is important the people should thus
understand the question of how far legislatures may require rail-
road companies to publish their proceedings without invaiding the
rights of the share holders. One of the worst evils of the day is
the growing disposition to invade the rights of individuals, whether
singly or in corporate capacity.

The principal charge, " That the railways control, absolutely, the pro-
duction and commerce of the tvhole country, dictating values to pro-
ducers, maniifoMurers, merchants, and consumers."
The basis of this charge is : That the railroads, being transport-
ers, make a charge for carrying the productions of the country and
the merchandise in return, and this charge has to be paid, and
therefore the producer receives less for his produce at market by
the amount of this charge for carrying it.

The gravamen of the charge being " that this power (of charging
for transporting) is arbitrarily exercised ; that the rights of entire
communities are disregarded ; the commerce of one city or town
artificially stimulated at the expense of others ; the principle of
the ' public highway ' entirely disregarded by favoritism to indi-
viduals, which practically makes one man rich at the expense of
his neighbors."

The extract from the address as already given embraces further
and more serious charges against the managers of railways. It
charges them with a dishonest management of their corporations —
with violating their contract with the State by which they have
' existence — with practically, illegally, and with intent, depriving
some people of their property and giving to others the benefit of
such values.

To sustain such charges the Committee offer the following speci-
fications, with the evidence :

" 1. Eegarding the charge ' that said railroads are in the habit
of carrying freight for the citizens of other States, and also for
citizens of foreign countries at lower rates than for citizens of the
State of New York.'

" This charge involves the question of through and local rates
on both east and westbound freight, and also the relative reason-
ableness of east and westbound rates. While it is manifestly
unjust to expect a railroad to carry freight at the same rate per
ton per mile on a short haul that it does for a long haul, we be-
lieve that there now exists too great a difference between through
and local rates on east and westbound traffic. The Railroad-
Gazette, in an article entitled ' The Legal Sanction of Combina-

tions,' after discussing the probabilities of the public sanctioning
legislation which would enable railroads to enforce combination
agreements on each other, says :

" ' The enormous differences between through and local rates,
which are the inevitable consequences of the present method of
doing things, are the occasion of most of the dissatisfaction with
railroads, and they are doubtless the cause of much actual injury
to a great many persons.'

" As an illustration of this, the rate for grain from Chicago to
New York is now eighteen cents per hundred pounds, with instances,
we believe, of special shipments at less figures, while the producers
living along the line of railroads in New York State are charged
much more than this rate for one-third to one-quarter the distance,
or, say five or six times as much in proportion to their western
brethren. The same injustice is done to manufacturers in this State,
who are obliged to pay such disproportionately high rates that it is
to their interest to locate in States further west. If this is a good
principle, why should it not_ apply to passenger as well as freight
business ? Westbound freights are carried cheaper for citizens of
foreign countries than for citizens of this State. For instance, an
English merchant is given a rate from Liverpool to Chicago less
than the combined ocean rate to New York and rail rate to Chicago.
Why the laws of New York should tolerate this discrimination
against its citizens it is difficult to see, for the two kinds of carriage
are distinct, and the functions of one carrier ceases when the other
begins. There is no good reason why a railroad should haul a car
load received from a ship any cheaper than one received from the
drays of a merchant in New York. At times freight has actually
been carried from Liverpool to points in the United States, one
thousand miles inland, cheaper than the same lines would deliver it
on the wharf in New York, the railroads taking their pro rata
share of the through rate. Another anomaly is the enormous dif-
ference in the rate charged by the railroads on through East and
westbound fi-eight. With a full traffic eastbound rates from
Chicago to New York, fourth class goods are now eighteen cents
per hundred pounds, while with two-thirds of the cars returning
empty, rates from New York to Chicago for the same class are forty
cents, a rate which is practically prohibitory for heavy and bulky
goods of low value. Eastbound rates are less than westbound,
owing to the lack of unity of action by the western connections of
the trunk lines, or, in other words, the natural law of competition
is in the one case left free to work, while in the other it is abro-
gated, the New York roads in each case receiving their pro rata
portion of the through rate according to mileage.

" 2. Regarding the second allegation, ' that individual citizens
in this State are given special privileges, and rates out of proportion
to those charged the public in general.' For instance, the schedule
rate from New York to Syracuse, on the New York Central Rail-
road, is 50 cents per 100 pounds for first class, 40 cents for second

class, 34 cents for third class, and 23 cents for fourth class. These
rates the great mass of the people have to pay, but a few favored
shippers at Syracuse are given rates, we are informed, as low as 10
or I'A cents per 100 pounds on all classes, as compared with 50, 40,
34 and 2a, which most people have to pay. Now, while it is quite
right that the shipper of a small quantity should pay more than the
shipper of a large quantity, we respectfully submit that the differ-
ence should be the actual additional cost of transporting the smaller
quantity. In short, that the principle of equality on public high-
ways should here apply, and that every citizen should have equal
right under the same circumstances. We believe tJaat the public
interest demands that this great discrimination between individuals
should be abolished, and that even the interests of the railroads
demand it. A large number of small customers are more desirable
than a small number of large ones, because they will pay a better
average rate. Individual enterprise is encouraged among a larger
number of persons, and both passenger and freight business would
be stimulated by a nearer approximation in the rates charged small
and large shippers. But aside from a question of interest, there is
a question of right involved which cannot be disregarded. This
principle is recognized in our postal system to even a greater extent
than we advocate for our transportation system, for here everybody,
whether he sends one letter or a thousand, is on the same footing.
Performing a public function, a railroad is upon a different basis
from the private citizen, and has no right to sell its commodity,
transportation, at a lower price to one person than to another, ex-
cept where cost of service enters into the question, and then only so
far as it does so enter. This may be a difficult matter to decide,
but by careful study the difference in cost of transporting small
and large quantities can be closely defined. At present there can
be no doubt but that the producers and smaller class of merchants
in this State are taxed enormously for transportation service as
compared with the large shippers to whom special contracts are
given. In some cases this discrimination amounts to virtual pro-
hibition, as, for instance, the Syracuse rates above mentioned, and
on coal, regarding which we find in the report of Assembly Com-
mittee for the investigation of the coal combination in 1878 (p. y),
the following words :

" ' The Erie Railroad having with many of the large producing
companies contracts for the carrying of coal at comparatively low
rates, dependent largely upon the price of coal as to amount, shield
and protect these companies and those in their interest from the
competition of other coal producers, and practically shut out all
competition upon the lines they control.'

" The recent developments regarding contracts with the Standard
Oil Company seem almost incredible, and show to what an extent
individual effort in any branch of business may be crushed out by
a combination between our modern highways and favored in-
dividuals."

First Specificatimi.
The first specification in the above quotation is, that there is
too great a difi'erence between the through and local rates on east
and westbound traffic, and they illustrate it by present rates on
grain, viz. : eighteen cents per hundred from Chicago to New
York, while producers in New York are charged much more for
one-quarter or one-half the distance, "or five or six times as much
as their western brethren."

Second Specification.

The second, that westbound freights are carried cheaper for
citizens of foreign countries than for citizens of this State.

Third Specification.

The third, the enormous difi'erence in the rates charged on
through east and westbound traffic, which the Committee ex-
plain as due to " lack of unity of action by the western connec-
tions of the trunk lines."

How Sates are Determined.
The Committee evidently do not understand the laws which
operate to determine rates on freight and on passengers on a rail-
way. They charge that rates are arbitrarily fixed, and that the
rights of entire communities are disregarded, &c.

It may be safely assumed, despite the unmanly, false, and un-
supported charges in the address to the contrary, that the mana-
gers of a railway company desire to make all the money they can
for their clients, and to do this they have constantly befoi-e them
the question what rate within their chartered limits will an
article bear that will yield the largest profit and at the same time
stimulate its production. To settle this rate, many questions
come in, which cover all the elements of quantity, cost of hand-
ling, risk, compactness of bulk, time, character of delivery, en-
couragement by rates to increase or limit the amount of the arti-
cle to be transported, and also the indirect advantages that will
come with the transportation of an article. These investigations
require a thorough comprehension of the cost of production, mar-
ket price, &c. In addition, there is in almost all cases questions
of competition with other lines. It will thus be seen that rates of
freight or of passengers cannot be arbitrarily fixed, and that the
rights of communities cannot be disregarded unless the managers

are totally incompetent, or they are reckless as to the profit from
their management of the property.

Eates of freight are therefore determined on true business prin-
ciples, quite as correct as regulate the merchant, the manufact-
urer, or the producer of any article to be transported. The same
general rules affect the rate on passengers, resulting in commuta-
tion tickets, coupon tickets, return tickets, way tickets, and
through tickets. Each class has to be considered by itself, and the
effect of rates on the ultimate profit. If the railroad companies
charge too much, they lessen their profits by decreased business.
If too little, they are giving to others profits that belong to their
shareholders.

Ansiver to the First Specification.

Apply these principles to the complaints, in the specifications.
1st, as to the difference between through and local rates in the
State. The Committee in the address acknowledge that there
should be a difference between a long and a short haul. They fail
to fix any rules for regulating such differences, and only charge
that the differences now charged by the railroad companies are
too great ; until they specify what such differences of rates should
be, there. is nothing in this charge to answer. It is a question of
opinion. Eailway managers may safely assume to understand this
subject better than the Committee. They have to consider it in
the whole as well as in detail — and having no personal interests to
influence them in favor of any special kind or class of freight their
judgment is more reliable.

Ansiver to the Second Specification.
So with the charge that enormous differences are made be-
tween the east and the westbound rates on freight. Here
the Committee assume to specify that while with a full traffic
eastbound fourth-class freight is carried from Chicago to New
York at eighteen cents per hundred pounds, it is wrong to
charge the fourth-class westbound traffic, with two- thirds of the
cars returning empty, at forty cents per hundred pounds, a rate,
which they assert, " is practically prohibitory for heavy and bulky
goods at low value." The Committee, in finding fault with these
differences of rates, gives two of the best reasons why the
railroads should do just what they are charged with doing, viz. :
The eastbound freight secures the maximum service of the
power, of the cars, and of the labor of the railroad companies ;

it comes in large quantities, full train lon.ds, and with a min-
imum cost of receiving and discharging — such freight can
be carried at low cost. But the Committee fail to understand
what, as members of a Chamber of Commerce of the first city on
this continent, they should know and what the railroad managers
do understand : that an important element in determining the rate
of this fourth class freight is the extent of the charge that class
will Bear, not only without discouraging its production, but with a
direct tendency to increase its production, and also that the value
of such fourth class freight is low and the responsibility for loss or
damage is in proportion ; while merchandise going west, being in
comparatively small quantity, of much greater value, with greatly
increased risij to the railroad companies transporting it, will bear
a much higher rate without reducing the quantity shipped. The
profit on this class of freight aids the company in bringing east-
ward the other lower classes of freight, and thereby excites pro-
duction without diminishing consumption, and increases the busi-
ness of the members of the " Chamber of Commerce " of the City
of New York. That the rate on the fourth class westward is pro-
hibitory is simply untrue, as the receipts of the different rail lines
amply demonstrate. The railroad companies are ever willing to
fill their cars, returning westward with low priced freight at rates
that will pay but little over cost, and if any of such classes of freight
are not carried it is because the prices offered are not remunera-
tive. But here again the Committee in the address, while they
make the general charge, fail to specify how far the railroads
■ wrong themselves and the public by their badly arranged freight
charges, for it is to be assumed that the Committee desire the
prosperity of the railroads, and if so, their criticisms on the rates
are to be accepted as on the judgment of the railroad managers.
If this is correct, then the Committee are gravely at fault in mak-
ing these serious charges of practical dishonesty against the rail-
road managers, when it should be but the deliverance of the as-
sumed better judgment of the Committee as to the framing of
proper railroad freight tariffs.

Ansiver to the Third Specification.

The charge under this head is " that the railroad companies
carry westbound freights cheaper for citizens of foreign countries
than for citizens of this State." This is attempted to be proven by
the simple assertion of the Committee, that " an English merchant

is given a rate from Liverpool to Chicago less than the combined
ocean rates to New York and rail rate to Chicago, and further, that
rates have been made from Liverpool to interior cities in this coun-
try, 1,000 miles inland, at less figures than the steamships would
deliver at the wharf in New York, the railroad companies taking
their pro rata share of the through rate."

The above charge is absolutely untrue. Some three years ago
the Grand Trunk Eailway Company did deliver freight on through
bills between Liverpool and Chicago at less rates than the ordi-
nary rates by water and by rail combined. This was met by the
New York Trunk lines by an offer to do the same and thus save to
the harbor of New York the advantage of having such freight
brought to this city. This prompt meeting such reduction had
the desired effect, and for nearly two years past no such freight
has been carried through the American ports. It was done by the
New York roads to meet what they considered unfair competition,
the result justifying their action.

Fourth — That individuals, citizens in this State, are given special
privileges and rates out of proportion to those charged^ the public in
general.

The Committee base this specification on a charge against the
New York Central Railroad, in imposing different rates for the
same classes of freight on different citizens of the City of Syra-
cuse, but they take good care to protect themselves with this ex-
pression : " They are so informed." That is, the Committee have
been informed, that on a road of some one thousand miles in
length, there has been one instance to confirm their charge, but
unfortunately for the Committee, this one proof to their charge is
knocked from under them by the distinct denial of the managers
of that road. It is very probable that the schedule rates of the
New York Central Railroad at Syracuse are at times modified to
meet rates of competing railroads, just as a merchant will vary the
prices of his goods or wares to meet prices fixed by competitors.
If the charge as made was true, it would not be a day before the
competing road at Syracuse, or at any other point, would offer the
same rates to all parties not privately but publicly.

The Fifth Specification — That rates are high on account of inside ex-
press companies.
The following extract from the report covers all that is said un-
der this specification :

" SPECIAL ' INSIDE ' EXPEESS COMPANIES.

3. " ' That tlie rates for transportation are made unnecessarily
high by tlie maintenance of subsidiary organizations designed to
deplete the revenues of the roads before tliey Jreach the stock-
holders.' Prominent among these are the fast freigh lines, bridge
companies, rolling stock companies, local lines leased at exorbitant
rates through collusion of managers, stock-yard companies, con-
struction and supply companies, lighterage companies, elevator and
other terminal facility companies. These and the practice known
as stock-watering have, perhaps, done more to enhance the cost of
transportation to the public than any other cause ; or, in other
words, to afford a pretext for charging the public unnecessarily
high rates for transportation service. Striking instances of this
practice may be found in the history of the New York Central &
Hudson River and the Erie Railroads ; the former, according to
current report, having first watered its stock at the time of consoli-
dating the various links between Albany and Buffalo, and subse-
quently in 1867 and 1868, when, it is said, some $47,000,000 were
added, upon which dividends have been declared, which, with in-
terest, amount to over $50,000,000. Is it just that the production
and commerce of this State shall be taxed for all time to pay divi-
dends upon fid itious liabilities thus created ? The report upon the
coal combination above alluded to, p. 8, says :

" ' During the receipt of these enormous profits, many of the coal
corporations, as was the case with railroads not engaged in the
coal carrying trade, unable under their charters, or for other rea-
sons, to declare dividends upon their stock that would absorb their
unexpended surface, issued additional stock to the stockholders,
for which they paid nothing, inaugurated what is commonly known
as stock-watering, or a capitalization of surplus earnings, which is
in substance exacting money from the people, creating an indebt-
edness representing the same, and making this the basis for for-
ever asking the public to p&j interest upon their own money so
exacted.'

" The railroad law of this State provides that when profits ex-
ceed ten per cent, upon the cost of railroads over and above the
cost of operating and maintenance, the rates for transportation may
be reduced by the Legislature so that they will not yield more than
this sum, but such practices entirely annul and defeat the evident
intention of legislators to protect the public interest after a fair
return is received for the capital actually paid for providing these
facilities. These subsidiary organizations are originated and fos-
tered by the managers or officers of the road, who thus use their
positions to serve their own pecuniary interests at the .expense of
stockholders or the pubHc. Mr. William H. Vanderbilt wrote a
letter to the Chairman of our Committee under date of February
21, 1878, in relation to the terminal expenses of the railroads at
New York. In that letter he uses the following words : ' Every

iDurdeh of this description is paid directly by the railroad, but nec-
cessarily reimbursed upon its traffic' It seems to us that these
words also apply in equal degree to the subsidiary organizations
above noticed."

The items in this specification are made against the New York
Central Eailroad. The personal assault intended in this specifica-
tion and followed up in a later one, even more personal, against
Mr. Vanderbilt, evinces gross ignorance of the ownership, manager
ment and offices of such " inside " companies.

So far as Mr. Yanderbilt or any member of his family are con-
cerned in any interest in or ownership of the shares of any such
company, it is confined solely and singly to an interest held by Mr.
W. H. Vanderbilt in the Sleeping Car Company, made necessary
and advisable, because the laws of the State will not permit the rail-
road companies to own such lines, and to secure the proper atten-
tion and comfort to the patrons of the road which he represents.

It is thought by many experienced railway managers that the
great cause of the irregular rates and injurious competition that
has prevailed between the trunk lines in the last few years has been
largely due to the abandonment of this medium of special fast lines
between the railroad companies and the shippers. The Com-
.mitfcte do not seem to be aware that there are certain functions of
a railrway that can be better performed by the introduction of
personal interest than by the company themselves.

But this question of the introduction of fast freight lines and of
leasing lines of railway, of stock-yard companies, lighterage com-
panies, elevator, and other terminal facility companies, if they all
have an existence, are matters for the shareholders to regulate, and
it is for them to decide about their efficiency and economy. The
point with the public is, the rates charged by the companies ; and
i^ as will be shown, no one railroad can control prices unless they
are the minimum rates, and that the other competing roads have to
adopt the same rates, whether they have their inside companies or
not, it will be clear that the public do not contribute to the rail-
road companies on aqcount of such "inside" companies, and that
they are as well treated as if such " inside " companies had no ex-
istence. Thus falls another charge of the Committee.

TJw Sixth Specification incltwtes the charge of keeping up rates to pay
dividends on ivatered stock.

Under the above heading is brought in the oft-repeated charge
of the rates"bemg kept up to pay dividends on watered stock.

The Committee charge that all stocks that have been increased
to represent increased values is necessarily "fictitious," and the
Committee asks with great emphasis, " Is it just that the produc-
tion and commerce of the State shall be taxed for all time to pay
dividends upon fictitious liabilities thus created ?"

This is purely begging the question. They should first show
that such increase of stock did not represent real profits. If it
does there can be nothing fictitious in such increase. It is a ques-
tion of policy, and one that well managed corporations solve in
different ways. As a fact the ordinary dividends earned, instead
of beiijg paid to the stockholders, were used by the company, and
paid out for new construction and equipment, and the stock was
issued to represent such construction and equipment.

As to rates being kept up to pay dividends on " watered stock "
it may be said that so long as the law exists permitting a railroad
company to make certain charges for the transportation of freight
and passengers such company would have the right to fix the
charges at the highest rate permitted by their charter irrespective
of the question of the amount of stock issued, and there is no
power that can alter the contract without the assent of the rail-
road companies.

But, as a fact, the railroad companies are rarely able to collect
the full amount of rates they are entitled by their charters to re-
ceive, on account of the laws of trade and the effect of competition
hereinafter discussed.

Competition fixes rates without regard to the amount of any
company's stocks or bonds. The five lines from Chicago bid for
traffic, and no line can procure any part of 'it except at the price
made by the cheapest route. Thus the sum which the company
can net from the business is the same, whether its capital is large
or small ; if too great, it is the sufferer in diminished dividends.

But the influence of the amount of capital stock on rates will
be hereafter more fully considered.

Avoiding tlie Imv of the State by issve of stock to reduce profit.

The charge that the railroad companies of the State, to avoid
the law that permits the Legislature to reduce the chaii;ered rates
when the profits of the company exceed ten per cent., have delib-
erately issued jidditional stock, without charge, to their sharehold-
ers so to reduce the per centage of profit below ten per cent., is
absurdly untrue, because, as no stock can be issued that does not

represent an equal value in property, tlie profit must have been
made that represented the principal of the stock so issued, and
such companies would have come under the operation of the law
if the Legislature saw proper to avail itself of its power in the
premises.

Incidentally, it is unfortunate that the writers of the address
did not comprehend the real meaning of the extract from Mr.
Vanderbilt's letter of February 21st, 1878, or, if they did, that
they pervert its meaning. The question of terminal expenses in
the port of New York is a charge upon the business of the city,
and operates against the increase and profit of its trade. If some
of the zeal which inspired the writing of -the address h^d been
devoted to aid the railroad managers in solving the questions, how
such expenses can be reduced, and by what means they can be
avoided, for the benefit of tire trade and commerce of the city,
they would have been employed in a more profitable and honor-
able occupation than in making charges that cannot be supported.

The Seventh Specification is a com/plaint that the management of rail-
m roads is arbitrary and inconsistent.

This, as seen below, is but a restatement of former charges as to
the management of railroads being arbitrary and unconstitutional,
especially in their arrangement of freight lists. It is not to be
supposed that the railroad managers would apply to such a Com-
mittee for advice respecting rates. If they did they would proba-
bly find the special lines of the business of the Committee
particularly recommended for low rates. Mr. Thurber could make
a rate for groceries, and Mr. Schultz tor leather and bark, that
they would approve, but it would probably not be found for the
interests of the railroad company, while it undoubtedly would be
for the interest of Mr. Thurber and Mr. Schultz.

"ABBITEAEY AND INCONSISTENT MANAGEMENT.

5. " ' That there is a general lack of that publicity and responsi-
bility to the public which properly belong to organizations
exercising a great public function like that of operating public
highways,' we would say that we believe that rates should be
regularly posted at every station ; that they should be the same
to all under like circumstances ; that a unit of quantity should be
established beyond which uo one should have lower rates, and
that the rights of persons who ship less than this quantity should
be defined and rates established therefor, only so much higher as

it costs to transport the smaller quantity. We believe that the
present management of our railroads is in many respects arbitrary
and inconsistent, among which we may mention the arranging of
freight tariffs and classifications, in which the public interest is
seldom consulted. An instance of this was the abrogation by the
pool lines of the fifth or special class on westbound freight, by
which the trade in heavy goods of low value— such as soda ash,
cement and salt— is greatly injured. The present classification is
full of inconsistencies; for instance, a bale of sheetings which in
1864-5 was worth $400 to $500 is now worth but $50 to $60 ; the
average value of a chest oi tea in 18G5 was, perhaps, $50, while
at the present time it is about $12 ; yet in both these instances
the articles remain classified the same as they were fourteen
years ago."

The Eighth Specification is an attack on the pooling system and agree-
ments as to rates.
The Committee, in the address, attack the system of "poohng"
freights, and of making combinations or agreements, as to rates,
as follows :

" POOLS AND COMBINATIONS.

" The pooling system above alluded to is worthy of your atten-
tion. It is ostensibly a device for preventing railroad wars and
securing uniformity and permanency in rates, objects which in
themselves are very desirable, but the present pool is objection-
able, in that it enforces too high rates on westbound freight. It
may be the only method by which dividends can be paid upon the
inflated capitals of the trunk lines, but in the mmds of many
persons there are grave doubts as to whether the public ought to
be thus taxed. It is safe to say, that, as a whole, the railroads of
the United States are capitalized on a basis of $2 to every one $1
actually paid in providing these facilities, and they could probably
be constructed to-day for one-third their present nominal value.
Combinations and pools are the only methods by which returns
can be paid to the holders of such railroad securities at present,
even with honest management, and in too many cases the interests
of stock and bondholders are subordinate to those of a managing
ring who purposely and dishonestly deplete the revenues so that a
majority of the bona fide owners get nothing ; and if it be decided
that the maintenance of such rates are unjust to the public,
then a prohibition of pooling and combinations is the shortest
way to reach such a result ; foi' the natural competition of rail-
roads wood soon result either in scaling down present obligations
or in bankruptcy (the same as mercantile houses, which by their
nature are unable to combine), and if reorganized upon a basis of
actual value, they could then perform the service at a rate which
would be just to the public, and at the same time afford a fair

return to shareholders. Such a process involves hardship to many
persons who now hold these securities, and it is only a question
whether or not the greatest good of the greatest number demands
such a course. We are of the opinion that the rest of the com-
munity have already, to a great extent undergone this process of
' getting down to hard pan,' and that the sooner such a basis is
reached by the railroad interest the sooner a permanent and
enduring prosperity will be attained."

The operation of the system of " pooling " and of combina-
tions as sometimes introduced between railroad companies
deserves a full consideration, as it involves the question of what
constitutes proper competition. We go further than the address,
and assert, that " pooling " is a successful plan " for preventing
railroad wars and securing uniformity and permanency in rates."

As general rules, when railroads compete for traffic, they offer
nearly equal facilities to shippers, and at nearly equal cost to the
railroad companies. That each competing line of railroad will re-
ceive a certain pretty well fixed proportion of the traffic, due to
the personal preferences of the shippers. That injurious com-
petition arises from an effort of the agents of one road to secure
the traffic that would preferentially be sent by another road, and
to succeed, will offer some inducements in the form of lower rates,
passes, etc. That the result of such efforts to induce shippers to
change their preferred railroad operates against all the competing
roads, because it works in both ways — whenever there is a gain,
there is also a loss.

This character of competition, as is well known, has been car-
ried to great extremes, and to the great and unnecessary loss of
profit to the railroad companies, without corresponding benefit to
shippers or consumers.

The shippers are nob profited, because the rates are Hable to be
changed at any moment, and the shipper who engages for the
transportation of his freight at a specified rate in the morning
may find that an hour later another shipper has secured a less
rate, and the profit of the first shipper is at least put at hazard.

These frequent changes of rates disturb and derange business,
and make results a game of chance.

The great value of the freight thus handled at competitive points
bears a large proportion to the value of the whole surplus produc-
tions of the country, and the uncertainty of the cost of delivery
of such freight at the chief markets of this country and of Europe

seriously disturbs the credit and the profits of all parties interested
therein.

The consumer is not benefited, because whenever any article of
prime necessity is, from any cause, sold below a fair cost of pro-
duction and delivery to market, it is followed by prices just as
much in excess of what would be, if just recompense had been at
all times rendered to all parties interested in placing any such
article of necessity in the market for consumption.

The shippers are deeply interested in having " uniformity and
permanency of rates." The main points of interest to the shipper
being that the rates shall not be so high as either to prohibit the
shipment or not to leave him a fair margin of profit on his ship-
ment. These two conditions of the shipper are the ones thai
determine the rates charged by the railroad company. To fix
such rates is certainly not a difficult question, and the variations
in the judgment of the traffic managers of the railroad companies
■ as to such rates would not be material.

There are, therefore, fair rates than can be established at all
competitive points which will deal justly with all parties.

If, then, the railroad companies agree to " pool" the traffic at
such competitive point-s, and fix the rates on the principles above
established, whose interests are damaged ? Wliat good reason can
be given against such an arrangement? The interests of all par-
ties are protected — the producer, the shipper, the transporter, and
the consumer, and the general moneyed interests are better o£f by
reason of such "pooling."

Another method of reaching the same end is by agreement as
to rates, in which case each railroad is left free to enjoy whatever
of traffic it may secure. This is the better plan when it can suc-
cessfully secure " uniformity and permancy of rates." •

It is acknowledged that these views will not meet the approval
of parties holding the opinions expressed in the address. Their
teaching of the proper meaning of free competition is not that
adopted by enlightened merchants in the conduct of their busi-
ness. Such merchants will explain proper comjietition, as such
that exists between men engaged in the same line of business for
the same customers, and that the prices charged shall afford a fair
profit. No one will be more ready than a merchant to condemn
as an unfair dealer any one who offers his goods at or below cost,
because it means ruin and bankruptcy to some, and, if continued,
to all.

Proper competition, then, is hot destruction to the interests of
all parties interested. These business principles are easy of appli-
cation to competition among railway companies.

The question of " discrimination" in rates, as it is called, is also
alluded to. This refers to differences of rates charged to different
persons for the transportation of the same class of freight, and to
differences of proportion of rates between non-competitive and
competitive points. The proper adjustment of rates in these cases
is a difficult problem. It is one which gives great anxiety to the
managers of railways, and any solution they arrive at is accepted
by them as approximate only. The proper differences that should
be made — for every one will acknowledge the propriety of making
some difference on account of quantity — can only be reached by
the experience of the results on the business and profits of the
companies, for it is a safe rule, that the policy which secures the
largest production of any article is the best for the producers and
for the railroad company. So much for the questions of " pool-
ing" and combinations between the railroad companies and dis-
crimination in rates by a company.

The address goes further than a condemnation of the "pooling"
system and other " devices" of the railroad companies by which
their profits are increased, and reveals the true nature of the oppo-
sition to such " pooling" and "devices."

There has been a great effort heretofore on the part of the
Committee to throw over the address a gloss of purity and great
interest for the shareholders of the railway companies and the
people. The destructive, communistic characteristics are now
developing.

The simple English of the latter part of the last quotation from
the address is, that after the Committee of the Chamber of Com-
merce fancied they had proven satisfactorily to your Committee
that there was no injustice in the existence of "fictitious" or in-
flated stock to enable the railroad companies to increase their div-
idends and avoid the law of the State ; that it would be an easy
step to carry the mind of the Committee one step further ; that
as the value of this fictitious stock could only be sustained by the
"pooling" process, the breaking down of the right to "pool" by
the railroad companies would destroy the value of such " ficti-
tious" stocks and indebtedness, and the result would be the entire
bankruptcy of all the railroad companies.

The extent of the appreciation by the Committee of the injury

that would result from such a course to thousands of persons, the
great suflering that would follow, the destruction of happy homes,
etc., is coolly exhibited in two or three lines in the address, as fol-
lows : " Such a process involves hardship to many persons who
now hold these securities, and it is only a question whether or not
the greatest good of the greatest number demands such a course."
It is not suggested by the Committee as a question of right, of
justice, or of law, that such injury should be inflicted upon inno-
cent people, but with the belief that such destruction of values
would decrease the cost of transportation on the railways and
benefit certain other interests. This Committee then ask your
Committee to recommend to the Legislature of New York the
passage of an act that would prevent " pooling," that their ulti-
mate aim might be accomplished.

The Constitution of the State and the higher courts are still
of some avail to protect the people from such a proposal as
that made by the " Chamber of Commerce" through its Committee
to the Legislature to deliberately pass an act, the object of which
was to bankrupt all the railroads in the State, to cause utter ruin
to the fortunes and comforts of many thousand citizens, and for
what purpose ? The Committee say, the " greatest good of the
greatest number." No amount of "good " to all the citizens of the
State would warrant such an act. No prosperity could ever be
"permanent" and "enduring" which was based upon the passage
of such a law.

The effect of all laios on the interest of the people ivhich tend to increase
cost of transportotion.

The railway interest in the United States is in an anomalous
position. Each State has exercised the right to charter roads
within its borders, and the General Government in the Territories
and unoccupied country, the result being a great network of rail-
ways covering the country, and responsible to as many authorities
as there are States, with the added one of the General Government.

If the State 'of New York had forbid any connection with the
railways of other States, then the question of rates on railways
would have been more readily solved. But such connections have
been authorized by all the States, aud in some cases authority has
been given by States for railway corpord,tions of another State to
pass entirely across their territory. This fact materially changes
the relation of the railways which connect with railways from other

States, with the State that gave it existence. Sucli railways are
brought under the cognizance of the laws of the United States, and
so far as inter-State commerce may be affected by the laws of any
State, they are secondary and subordinate to the laws of the
United States. This subordinate position will go so far as to pro-
tect the property of any person from one State being taxed in its
transit into or through the territory of another State. Some of
the States have sought to avoid this law of the Constitution of the
United States by various devices. As this class of tax, and the
object of it, becomes more thoroughly understood by the people
and the courts, and its real and oppressive character becomes
known, it is but fair to expect a revision of the decisions so far
given in their favor by tbe Supreme Courts of the different States.
How far any law can hereafter be passed by any State which
looks in the direction of such taxation, it is now impossible to say;
but one thing may be accepted as certain, that the tendency will
be for the decisions of tbe courts to take broader ground, an^ not
to countenance any evasion of law, though it be enacted by a
State Legislature. The railroad companies being the mediums
through which the people and their productions are mainly carried,
the true interests of the people are undoubtedly that the charge*
for such service should be the least possible. Every item that
goes to make up the total cost of such service becomes part of the
charges the railroad company makes for its performance, so far as
it can, and is not prevented by competitive rates. Therefore,
any action of. the Legislature which controls the ability of the
companies to offer its services to the people of the country at
large, and at the lowest rates, is to that extent in the form of a tax
upon the people, both of this State and of other States, and
would be unwise and injudicious. A free, untaxed interchange of
the people and their productions is for the best interests of the
people of each State, as well as lor the country.

The laws of trade know no boundaries of States in this State-
associated country. What are they ? What is their influence ?

TJie laws of trade regulating commercial relations as well as rates.

By their operation commercial centres are built up or destroyed.
Manufacturers are successful or fail. Productions pay or are
raised at a loss. Land becomes valuable or is a drug on the mar-
ket. The homes of princes become the homes of mendicants.
The homes of the poor make way for the palaces of the rich.

Many great and material changes are constantly taking place in
every part of the country by changing conditions of trade. In the
development of a new country such influences and changes are
more apparent — the population is migratory, and people seek new
places where they hope to improve their condition. Such movings
of the people introduce either new productions or at less cost, and
the people of the older country will build canals and railroads
to reach the places where the necessaries of life are to be
obtained more cheaply.

The population of 3,000,000, scattered along the Atlantic coast,
has increased to over 40,000,000, spreading from the Atlantic to
the Pacific ocean, and the few common roads have been followed
by the turnpike, the canal, and over 70,000 miles of railways. The
producers first went to the consumers for the supplies of clothing
and small luxuries like sugar, tea, and coffee, and for the few neces-
sary manufactured goods and wares. But this kind of exchange
has increased until the supplies to the producers have followed
them more than a thousand miles west of the Atlantic coast, while
the freight of the producers is sent eastward, past the supplies, to
consumers in different parts of this country and Europe. These
changes have all been due to the laws of trade, which Legislatures
cannot control. There has been depreciation of the values of prop
erty in parts of the older country, a disturbance in the great center.s
of population. lu many districts the population has decreased.
Lands once productive of profit to the farmer will no longer re-
turn the same profit nor give support to the same number of people.
These disturbances are real and will be lasting. In sections of
country or in cities where such disturbances have been deeply felt,
the only hope for the people is to devise new elements of success,
to strike out in some new path that will restore to them population,
prosperity and wealth.

These facts should influence Ihe legislator when he begins to leg-
islate about the great mediums through which those changes are
made. He must remember that these laws affect the country as
a whole, that they ignore all artificial, political and State lines. If
this whole country was embraced within the boundaries of the
State of New York, its Legislatuie might have at an early day
limited the boundaries of population, and at such a time it would
have been proper to discuss the propriety of such limitation. But
New York, while an Empire State, is but one of many ; the pro-
portion of her population is less than a tenth of the whole popula-

tionof the country, and such proportion will continuously decrease.
Other States will not be influenced by her action, their connections
with the interior country being sufficiently covenient and economical
to secure to the country all the needed railway and other facilities
of commerce and interchange of ti'affic independent of the State
of New York. No State can therefore legislate as if it was an em-
pire, bat must be governed by the general policy of surrounding
States.

It may then be accepted by the people of the State of New York
that the people of the country will continue to indulge their migra-
tory disposition, that emigration from the older will continue to
add to the population of the newer countries, that railways will
be built to follow this tide of westboimd people, and that the inex-
orable laws of trade will continue in operation.

The enterprising and far-seeing citizens of New York clearly
appreciated such tendencies and such results more than half a
century ago. It was with this understanding that the Erie canal
was built by the State, that the building of railroads was en-
couraged and permission given them to connect at the State line
with railroads in adjoining States. The policy of the makers of
the present greatness of the City and State of New York differed
greatly from that approved in this address. If the policy enunciated
in this address had prevailed in former times it would have limited
the extent of cultivated and improved farms to what was required
to feed and support the population of the City of New York, at the
time of its Dutch forefathers, because every improvement in reduc-
ing the cost of transportation has introduced new competitors for
the markets of this city. Under such a policy the greater part of
the Empire State would be to-day a forest, and New York City
would be but little larger than it was under the government of
Peter Stuyvesant.

The railroad companies of other States have penetrated great
districts of country outside thelimitof this State, and the produc-
tions of the people of other States are brought into competition
with thot>e of the citizens of the State of New York with whatever
of injury necessarily accompanies such competition.

But the opening of the Erie canal had the same tendency and
was built for the acknowledged purpose of not only carrying the
surplus productions of this Srate to a market at the City of New
York, but with the express design of attracting the productions of
the western country to the City of New York. The wisdom of this

policy is doubly confirmed by the rapid growth of the population
of the State and City of New York, and the grand development of
its commerce and enormous increase of its wealth. It will be re-
membered that at the time of the building of the Erie canal, the
City of New York was inferior in population, commerce, and wealth
to many other cities on the Atlantic coast, while now it stands
through the policy then udopted, at the head of and far in advance
of all other cities on this continent, in all the elements that make
one city greater than another, and all this is due to a policy the
opposite of that which the writers of this address would impress
on the Committee of the Assembly as prudent, wise, and for the
interests of the citizens of the City and of the State of New Y'ork.

Question of relative charges for through and heal freight.

The above considerations are necessary to enable the people of
the State of New York to decide whether they can afford— grant-
ing the authority to pass laws such as the address of the Chamber
of Commerce contemplates — to prevent the railwry companies in
the State from carrying through freight from beyond the western
boundaries of the State to its chief city at less rates per ton per
mile than they charge to the people within the limits of the State,
even with the acknowledged fact that through such rates the peo-
ple of the State cannot compete in prices with the productions
thus brought within their State, and that great interests are thereby
sacrificed and that the cultivation of many acres of good ground
must be abandoned, the great mills which once converted the grain
into flour must be abandoned, and mauy other interests suffer
greatly. This is staling the case as broadly as the " Chamber of
Commerce" could desire.

And, varying the form, the question is again a«ked. Would it be
to the true interests of the people, and is it the true policy of this
State, now to pass laws that would prevent the railways from car-
rying through the State the productions of the people of other
States? for only under present conditions of freedom to make
rates can such freight be carried.

Effect of laws limiting through rates to proper proportion lehoeen
through and local rates.

It such laws could be passed that would prevent the railroad
corporations of this State competing with the other trunk lines for
the -western trade, by limiting the rate per ton per mile charged
9

by them to the absolute difference in cost between local and
through rates, what effect would such laws have on the local rates
and on the wealth and prosperity and business interests of the
City of New York, and the towns, cities, etc., on the lines of the
railroads, and the proportion of taxes to be paid by the agricultu-
ral districts of the State ?

A few suggestions on this point may not be without profit to
the Committee as well as to the Chamber of Commerce, whom they
represent.

The operation of such laws on rates would be that, if the rail-
road companies continued their competition for western traffic
with the other trunk lines, at certain times the proportionate local
and through rates within the State would be much below the cost
of transportation, and, if the railroad companies base their rates
for through western traffic on a proper proportion between the
cost of remunerative local rates and such through rates, then the
rates on through traffic would be so high as to exclude the two
lines we represent from the ability to compete with the other trunk
lines.

In this way the passage of any law establishing a minimum rate
to be charged on through freight from other States by the New
York Central and the Lake Erie & Western Railroads would at
once remove those lines as competitors with the other trunk lines
for the transportation of western traffic. The Grand Trunk, the
Pennsylvania, and the Baltimore & Ohio Railroads would not be
long in calculating the lowest price the New York lines could
legally charge, and then, by going a fraction below them, control
all the traffic, which would go to Boston, Philadelphia and Balti-
more in place of the City of New York.

Again, if laws were passed compelling the railroad companies in
New York to retain an assumed difference between through and
local rates, the execution of such a law would be almost impossi-
ble, for railroad rates change every few days, and s'ometimes more
than once in a day.

But the address suggests that the railroad companies shall post
their rates. If this is to be of any service, such posted rates must
be held unchangeable for a specified number of days. This sugges-
tion carried out would prove to be a capital thing for the rival
roads, for they are free from such an absurd condition, and would,
of course, take advantage of it. It must be remembered that there
are railroad connections between the important centers of the

State and the Cities of Philadelphia and Baltimore ; that the dis-
tance to these cities in the State of New York is proportionally
small, and, therefore, any action of the State would affect but part
of those lines to the seaboard, while it would affect nearly all the
line of the New York, Lake Erie & Western Railroad, and all the
lines of the New York Central.

The general argument in favor of some proper proportion of
rates bping sustained between the through and local rates is right
and just, and should be adhered to as far as possible. If the pro-
portion be made absolute by law, the result would depend on the
basis assumed. If the railroads should be forced to reduce their
local rates to the proper proportion due at any time to competi-
tive rates, then the consequence would be the roads could not fur-
nish their present facilities to their local customers, would be-
come bankrupt, and the Committee would then realize their ex-
pressed desire ; but under no reorganization could the railroads,
under such restriction, do better as to rates than the original com-
pany did before such bankruptcy.

The competitive rates at times are fixed at cost of transporta-
tion, and sometimes below cost. The trunk lines of New York
cannot regulate this question. The management of those lines
expect that the average of through rates during the year will pro-
duce a profit — and such average of rates does not differ much
from a proper proportion between the through and local rates
withiu the State ; but whether proper differences are sustained or
not, the question still comes back : The New York lines must
either be free to meet the competition or abandon the western
traffic to the other trunk lines.

Again, the local rates now charged are largely below what they
would be if the through business was stopped as proposed. ■ The
economy, or rather the low cost of transportation that has been
reached, is due more to the volume of traffic handled than to a
great reduction in the items of cost, of material, etc. If the trunk
lines are to be prohibited from making rates below proper propor-
tional rates, the lessened traffic they will carry will necessarily
increase the cost per ton per mile of that which is transported,
and thereby the charges on local traffic will be largely increased.

Another effect of decreased through traffic on the country
through which the trunk lines pass would be to decrease the facili-
ties now enjoyed. The fact of the through lines engaged in the
competitive business gives opportunities to greatly accommodate

the local trafiSc on these lines, in rapidity and frequency of transit,
in terminal arrangements, etc. These accompanying advantages
of the through traffic are hardly known or appreciated by the
people. The loss of them would be severely felt.

The accommodations for passenger travel vrould share like fate
— the large traffic induces an increase of travel. Cut off this
through travel and the railroad companies could not afford to run
as many trains, nor at as high speed, and the comforts of cars
would h«;ve to be lessened.

The effect of laws against " discrimination," unless it be where
the traffic offered is in all respects alike— and no railway officer
would make any difference in rates in such a case — would be to
send tlie freight of large producers and of large manufacturers to
the Cities of Boston or Philadelphia ; because, while the railroad
in this State conld make no proper allowance for the difference in
tonnage offered by parties, it would be sent by the rail line t^at
would be the least distance to the borders of the State of Massa-
chusetts or of Pennsylvania, and the railway companies in those
States could afford to make the allowance in rates required to
secure such freight.

Again, the large tonnage of the through freight causes the em-
ployment of much labor in all the varied departments of a rail-
road ; it also causes a demand for large supplies of material. Cut
down the number of thirty or forty thousand employees of the
New York Central & Erie Railroad one-half, and cut off the de-
mand for supplies proportionately, and the towns, cities and coun-
ties on the lipes of their roads would feel the loss severely.

There is another view of the charge that is made, that the rail-
road companies by their tariffs of rate work against the local in-
terests of the country through which they pass. The New York,
Lake Erie & Western Railroad Company, and the New York Cen-
tral, for the greater part of their lines, are connected with branches
and connecting roads, which furnish to the towns and cities on
either road competitive prices to the City of New York. There
are also the Midland of New York, the Delaware, Lackawanna &
Western, and the Lehigh Valley Railroad Companies, which make
connections through Central New York, and are also competitors
with the New York Central and the New lork, Lake Erie &
Western Railroads for the local business between the country
south of Lake Ontario and New York City. There are several
other lines of railroad reaching the same territory, with their

eastern termini in the Cities of Philadelphia and Baltimore, fur-
ther the Comoiittee could not have been ignorant of the fact that
the Erie Canal is open nearly eight months in the year, and that
the State fixes and controls by its toll sheets on the canals the
maximum rates between the most distant through and all inter-
mediate points in the State. That, as a consequence, the ra'lways
cannot in the winter much exceed those rates from local points
without losing the whole traflBc. And the people are thus pro-
tected from any high rates, if the railroad companies should
charge them. This power of controlling rates by rail has been
exercised by constant reduction in canal tolls and a corresponding
or greater reduction in rates by rail has been unavoidable. What
, justice would there then be in the State first forcing down all rail
rates by its control of the toll sheet of the canals, and then de-
manding that the railway companies shall not exceed that standard
in their charges.

It is therefore, fair to suppose, from the competition between so
many railroads and the Erie Canal, that the people of Central New
York receive rates as low as they can be profitably made. It will
be noted that these latter named roads are not competitors for the
trunk lines for western business, and therefore have no induce-
ment to keep up local rates to help make up the small profits on
western freights.

So much for the consistency of the recommendations and charges
in the address as to the wrong committed upon the people of the
State by the, at times, great and disproportionate difference in
rates between the through and local business.

Charge that railroads keep up high rates to pay on luatered and ex-
cessive capittd.

Another law of trade will answer the charges made in the ad-
dress and heretofore noticed, that the railroads are forced to
keep up rates to protect inflated capitals, excessive cost, watered
stock, etc.

Established basis of cost and value of railroad property.

Before considering the law of trade applicable to this charge, it
will be well to understand clearly on what basis should the cost
and value of railroad property be established.

The Committee asserts in the address, as has been quoted, that
the capital of railway companies should be reduced one-half to

two-thirds— that is, to the cost of construction to-day. Tbe only
arpiument they offer is that other Talues have been reduced, and
therefore railroad values should be similarly treated. It is a bold
assumption that the cost of constructing the New York, Lake Erie
& Western and the New York Central would be from one-half
to two-thirds less to-day than is represented as cost on the books
of those companies. It is not worth while going into an argument
about a thing that could not now be decided, because it would
only be assertion on either side. But under this head there are
two or three things that may be considered :

First. — A greater portion of these roads were constructed at
times of low prices, even lower than at present rates, and so far
there would bo no advantage in their being now constructed. The
real estate damages were then far below what they would now be.
The real estate purchased for depots, stations, machine shops,
yards, wharves, etc., would cost, if it were purchased now, many
millions of dollars more than the original cost Avas to either of
these companies.

Second. — The large amount of money expended on the roads and
property, that has been heretofore met by the expense account,
has no representation in capital.

Third. — The losses met by the railroads in paying for experience
and in bringing their roads, machinery, etc, to their present con-
dition. .

Fourth. — The loss on capital invested. If interest was charged
upon all the real capital invested in these railways that has not
been paid, it would amount to a great deal of money. In view of
all these suggestions, no one could say that the present railways
could be duplicated at one-half or two-thirds their present cost.

But another thing must here be remembered : The value of the
present branches and connections of these roads must be consid-
ered as part of their present cost and value of the property. By
the influence and aid of the main lines these branches and connec-
tions were made, and they go to all parts of the State of New
York. The building of such branches and connections is part of
the wealth they have brought to the State, as they have been built
largely through the capital invested in the New York, Lake Erie
and "Western and the New York Central Eailroads ; in other words,
if these main lines had not been built, these branches and con-
nections could not have been constructed, and the development of
the State, the millions of money left by the traffic passing through

the State, and the great growth of the commerce and the popula-
tion of the City of New York would have been equally reduced.
These results have been worth many millions to the State, and the
railroad companies who have done this are entitled to consider a
small part of it as part of the return they have made the State. It
is, in any view, unfair to institute a measure of the value of the
railroad by ignoring all that they have done in this way of increas-
ing the value of property in this State and the wealth of the people
of the State.

Again, the present working organization of either of the roads
we represent is of great value. If these roads were to be built
to-day, it would require a large expenditure of money before the
present working organization of their roads could be established
— the cost thereof would be a charge against the traffic. While
the value of the organization may be difficult to estimate, yet it
will be accepted as materially aiding it; the economy of manage-
ment, which must have a money value.

Again, the proposition of such reduction of capital is unfair, in
that it would apply an unfair rule to the value of property. If
other properties are temporarily decreased, such decreased prices
are not necessarily stationary. While the Committee wish rail-
road values to be fixed and made stationary at present cost, no in-
dividual would apply this rule to his .property, nor would the
Committee or the members of the Chamber of Commerce be wil-
ling to limit their profits hereafter to those that have recently pre-
vailed, c r to permanently hold their real estate at present prices.

Even if the principle of a reduction be admitted, such value
should be based on an average c(jst, and in this case with a fair
equivalent for other values heretofore stated, the present valuation
of the roads would be quite reached.

But there are some other considerations that should be kept in
mind by the Chamber of Commerce and allied associations in the
City of New York. The proprietors of these railroad companies
are entitled to a greater profit from their investments, and have to
pay a higher price for the money they borrow, owing to the in-
creasing insecurity of their investments. It need not be repeated
here that the price of the use of money depends on the security of
the payment of the interest and of the repayment of the principal.
Railroad securities should be considered as secondary in safety
only to those of the General Government. If they were the rail-
road companies would be able to bprrpw money at not exceeding

4| to 5 per cent, per annum, and shareholders would be willing to
accept 5 or 6 per cent, per annum on their stock, and in this way,
if other things were equal, rates of transportation could be re-
duced or greater facilities afforded at the present rates. Among
the reasons that affect the security of railroad investments, and
which can be remedied, are :

1st. The existence of free railroad laws. While such laws are in
existence the property of all railroads is uncertain in value. Such
property is subject to injury from speculators, who have no per-
manent interests, amd depend on taking advantage of favorable
conditions of the money market to construct rival and competing
roads, which are not needed for the accommodation of business,
and which generally end in inflicting higher rates upon the people
than previously existed, and reduciug values of property. To the
existence of such laws in the States maj be attributed many of
the railway disasters that have ruined so many railroad companies
in this country, seriously affected the prosperity of others, and
prevented them from being as useful to the country as they would
have been without such unfair competition. The State should
preserve through her Legislature the determination of what rail-
roads are needed, and place them under proper laws, wliich fairly
recompense the owners, and fully protect the interests of the
people.

2d. The spirit evinced in the address, which is destructive in
its tendencies. The Committee evidently felt the force of this
or they would not have denied it in advance of the charge being
made.

The growth of a disregard to the rights of property in this
country is very marked; and railroad corporations offer favorable
forms of attack. The encoura^jement given by such a bodv as the
Chamber of Commerce to such ideas will not stop at railroad cor-
porations, but will reach all kinds of associated capital, and will
not be stopped before it reaches all property. This growing ten-
dency to socialistic principles is one of the most dangerous sigi s
of the times, and if not checked, will produce scenes of disaster
that would now appal the country. This answer to the charges
as to high rates on account of watered stock, etc., and the reduc-
tion of the cost to one-half or two-thirds per cent., in the address^
is confidently submitted to the consideration of every fair think-
ing citizen, as full and complete, and that the cost and value
of a raOroad property is not to be fixed by the present cost of a

mere construction, but must be determined by at least a cost of
average years, and the value of the several points herein sug-
gested.

Baies not controlled by Capital of Railroad Companies.

To return now to the consideration of the law of trade affecting
the charge that the railroads are forced to keep up their rates on
account of their excessive capital due to inflation, water, etc.

Given the question as it stands, with all the other rival and com-
peting roads built, equal at least in their ability to carry freight, it
is safe to say that the amount oF capital in none of the roads af-
fects the rates for transporting freigl.t and passengers.

The great contest between the East and West rail lines of the
countiy is for the transportation eastward of the surplus produc-
tions of the country. If there were no competition for this busi-
ness, and either the New York, Lake Erie &r Western Railroad or
the New York Central controlled it, there might be good ground
for the assertion that the railroads are governed in their charges by
the amount of capital, because they woukl charge rates to cover
such capital. But it is not so. There at least five competitors
for the thiough traffic to the, seaboard — the Grand Trunk to Port-
land and Boston, the New York Central, the New York, Lake Erie
& Western Eailroad, the Pennsylvania Railroad, the Baltimore &
Ohio. The competition from the Chesapeake & Ohio Railroad
and from the Mississippi river will be greater in the future. 'J he
Welland and Erie canals are also competitors for the through
traffic for more than seven months of the year. The rates of
freight charged on the Erie canal regulate the rates by rail, so
that for the greater part of the year and on the largest portion of the
tonnage brought eastward, these ol)jectionable through rates, which
are comp'ained of in the address as so thorougiily discriminating,
are fixed and determined by the rates on the Erie Canal, the prop-
erty of the State. And more than this, the sympathizers in the
principles of the address in the City of New York desire to increase
this competition by taking off all tolls on the Eiie canal. By
reason of this competition, rates are governed— after allowing for
so much as the article to be carried to market will bear — purely
by the figures any one of these rivals may choose to fix, and the
traffic will go by the line that carries at the lowest figures, irrespes-
tive of the capital of any railroad. And further than this, such
is the character of the parties controlling these roads, and the de-
10

mand made upon them by the cities thej represent, that it may
be assumed that rates will be made and followed by any and all
of these companies, though it bankrupts each company. True,
this is not anticipated, as it is thought by each company that the
officers of the other companies will agree to rates that will save
them from bankruptcy before that time comes. So that the laws
of trade, in which competition is a great element, regulates the
rates, and not the amount of capital of either of the roads.

The same law operates with the merchant. He cannot add a
charge on the goods he sells on account of the extra cost of the
store in which his business is transacted. While the law of the coun-
try does not limit him in the profits he may charge, yet the laws
of trade do limit his prices to the extent of the ability of his cus-
tomers to pay and the degree of competition he meets with.
Neither can it be said that the buyer is free to select from whom
to purchase, while the people on a line of railroad are confined to
such road ; because in the State of New York the competing rail-
roads furnish means of access from almost every district and
town to every part of the country for the movement of persons and
freight.

Charges of discrimination against the City of Neiu York in favor of

rival cities.

Prudential considerations regulate the question of discrimina-
tion, as it is styled, against the commerce of the City of New York
by the New York Eailroads agreeing to lower rates from western
centers to Philadelphia and Baltimore than to New York. In the
first place, the controllers of the Pennsylvania and the Baltimore
& Ohio Railroads believe that in justice to the exporting cities
they represent that there should be a difference due to their de-
creased distance from Western centers, and to the advantages the
City of New York possesses over them in securing lower rates on
produce exported. Such difference these roads will insist upon to
the bitter end. So that the question the New York companies
have to decide is simply— Is it not better for all parties that the
least difference attainable should be allowed, than that all parties
should be reduced to bankruptcy, which seems to be the great
desire of the Committee of the Chamber of Commerce ? On this
principle the differences have been allowed. The principle of the
address is of the dog in the manger type. They do not wish any
other city to have any business ; they desire to absorb it all and

keep it to themselves, no matter wliat private or personal injury
is done to other parties. They are unwilling to meet a fair com-
petition with the other cities. They know the City of New York
has many advantages in trade over other cities, more than any
difference in rates allowed ; but they would rather see their own
lines permanently bankrupted — for any reconstruction would but
reproduce the same spirit of competition — than that the rival
cities should handle a small percentage of the exports of the
country.

They seem to be ignorant of the fact that the commercial advan-
tages will permit any increase of the business of the City of New
York, because of the great volume of the import, export, and dis-
tributing trade it does and will always control, while the extension
of the trade of Boston, Philadelphia, and Baltimore is restricted,
because such trade cannot be profitably increased beyond certain
limits fixed by their general business.

The spirit manifested in this part of the address is entirely un-
like what would govern merchants under like conditions who un-
derstand that proper competition is not destructive.

The following extract from the address covers the above point,
and introduces against this " discrimination " another argument
which will be noticed :

" The pool lines have also established differential rates between
the principal seaboard cities and Western points, in which occurs
the curious anomaly of Baltimore, Philadelpjiia, and Boston all
being accorded lower rates than New York, the first two osten-
sibly because their distances to Western points are shorter, and
the latter because its distance is longer ; or, in other words, be-
cause Boston has the advantage of a competing road (the Grand
Trunk), which, by reason of its situation, cannot enter the pool.
The present managers of the New York trunk lines profess to be
powerless to remedy this discrimination, because they say to give
equal rates to New York would divert business from other sea-
board cities, and this would bring on a railroad war. Yet, on
through business to and from foreign ports the rate is the same
through all our seaboard cities, it would seem as if there is no
good reason why it should not be so on traSic which stops at the
seaboard. As regards our own city, we are fully convinced that
New York merchants are entitled to not only as low but even
lower rates on West bound freight than from any other seaboard
city, the ' distance argument ' being far outweighed by the pre-
ponderance of business furnished by our city and by other con-
siderations well known to railroad experts. It is a fact admitted
among railroad men that it costs the New York Central Eailroad,

distance Dotwithstanding, cons'derablyless to take goods from the
seahoard to the West than it does either the Baltimore and Ohio
or the Pennsylvania Kailroad, and if the doctrine enunciated by
Ur. Vaudeibilt in one of his letters is to be accepted, which is
substantially that the natural advantages of New York mnst be
abrogated at the dictation ot the Baltimore and Ohio and Penn-
sylvania railroads in order to pr-^vent a railroad war, then our
merchants must look forward to establishing branch houses in
other seaboard cities, our owners of real estate to accepting a
further reduction upon their already greatly reduced rentals lor
property^ our munici|..al authorities to a reduction in tax-paying
power, which not only will inevitably compel a wholesale reduc-
tion in the expenses of government, but also impair our ability to
pay interest upcm our municipal securities, in which, through the
savings banks, the savings of the people are largely invested."

Comparative cost of trunk lines traniportinq per ton per mile.

This argument is " that it costs the New York Central Railroad
considerably less to take goods from the seaboard to the West
than it does either the Baltimore and Ohio or the Pennsylvania
Railroad, and therefore that the New Yorfc Central is abandoning
the advantages of its position in accepting higher rates from New
York or agreeing to lower rates from Philadelphia and Baltimore."

Rates of freight between the Atlantic cities and the West are
not determined by the individual opinions of the managers as to
the cost of such service on the competing lines. Indeed it would
be a difficult problem for the managers of any of these lines to
state what was the exact cost of their through business per ton
per mile. No two of them would equally estimate many elements
that enter into and afilect such cost. Each trunk line has certain
advantages, and labors under certain other disadvantages when
the cost of transpoitation is compared.

While we do not, therefore, assume to determine what either of
the trunk lines would affix as the cost per ton per mile of their
through traffic, we do affirm that whatever differences of cost may
exist, ihey are not of sufficient importance to affect the result.

Ihe Committee are again in error when they make the infer-
ence that the rates from the West to the cities of New York,
Philadelphia and Baltimore are the same " on through business
to and from foreign ports." The trunk lines sustain their rates to
the respective cities, the differences between these and the through
rates to Liverpool being adjusted by the North Atlantic Steam
Conference.

That New York City has natural advantages for commerce and
business above the rival cities cannot be denied, and that in the
average freighting of a year, its imports and exports will cost less
per ton than to or from the other cities.

The merchants of this City will thus understand their true posi-
tion that, with greatly superior natural facilities for commerce,
with a large trade already made, with an average less cost of
freight on imports and exports in their favor — but as against
them, a small difference in cost of sending to or receiving freight
from the great centers of the West.

Is this position ruinous or destructive to the interests of New
Yorii City ? Will not the City of New York receive the lion's share
of the traffic ? Undoubtedly, if the present race of merchants
have the energy and business wisdom that has characterized their
predecessors.

The jobbing and other interests injured by railroad rates.

The address closes up as follows, with a statement of how these
differently enumerated grievances affect the prosperity of the City
of New York :

" The late Cornelius Vanderbilt, previous to his death, stated
that New York should have rates for railroad transportation as
low as any competing city, and your Committee have been loth to
believe that the present managers of this great highway are disposed
to pursue a policy which is not only unjust and detrimental to New
York's interests, but which cannot fail to injure their own. The
Erie canal doubtless concentrates a large business at New York
which, durinij; the winter months, yields a large revenue to the
railroads, but the Erie canal cannot retain the great jobbing trade
of New York, because this is dependent chiefly upon railroads for
the distribution of its merchandise throughout the country: with
this once diverted, and with manufactories of many articles firmly
established in the interior, the property of Mr. Vanderbilt and of
other citizens will depreciate together. Thus far the depreciation
has been all on one side, but cannot always be so, nor can Mr.
Vanderbilt, even if so disposed, continue to maintain rates which
yield eight per cent, upon a largely inflated capital, besides a per-
sonal revenue scarcely inferior, derived from a variety of subsidiary
corporations designed to deplete the revenues of his road before
they reach the stockholders. No one can have failed to notice the
diversion of our jobbing trade above alluded to. The changes
which have taken place in the dry goods, grocery, hardware and
other leading trades are enormous, and it may safely be said that
New York jobbing houses generally are at the present time doing
business on unsatisfactory margins, which they are forced to do in

order to make up for the discrimination against them in freights,
and this is perhaps the least injurious feature of the situation, the
loss of prestige being even more hurtful than the actual money
loss. All New York jobbers know that the ' difference in freights '
is constantly and effectively used as an argument against them,
both by the interior jobbers who are favored with low special rates,
and also by the distance discrimination in favor of other seaboard
cities. This is a phase of the transportation question not general-
ly appreciated. Some persons cannot understand that with our
export figures so satisfactory there can be much cause for com-
plaint ; but most of the produce exported merely passes through
oti its way to a foreign market, yielding but little proiit to New
York, wiiile a jobbing or distributive trade of smaller proportions
is much more remunerative. The railroads apparently care noth-
ing for the jobbing trade of New York so long as they can secure
the large export and import trade, and also charge the present
enormous local rates to the people of this State ; but this policy is
most detrimental to New York City, and the lack of prosperity for
this City means a poorer market for the producers of this State,
and an inability on its part to contribute $1,000,000 per annum
more than its pro rata share to maintain the public schools of the
State ; this the members for the interior of the State who were free
from railroad influence and who voted for the investigation, doubt-
less fully understood. i

" Your Committee believe that New York has a prior claim to
this trade, as it first settled and naturally belongs here. The rail-
roads have no right to break up the jobbing trade of this City and
transfer it to the interior either of our own or other States, nor do
we think they have the right to so discriminate between large and
small shippers as to prevent the latter choosing in what market
they will make their purchases. It was for the purpose of having
an impartial trial of the questions at issue between the railroads
and the public that an investigation was asked for ; we believe this
is due alike to the public and the railroads. Similar investiga-
tions in England have gradually defined the rights of the public,
and a permanent national board of commissioners has been es-
tablished to supervise the working of this great power for good or
evil. Upon the thoroughness of your investigation depends, in a
great measure, the commercial and industrial welfare of the entire
community. It is hardly possible to imagine a subject of greater
importance, or one which affords wider scope for patient, states-
manlike investigation. We venture to express the hope that suf-
ficient time will be given to the subject to make the examination
an exhaustive one, and that if any additional powers are required
for that purpose, they may be conferred upon your Honorable
Committee by the Assembly."

In analyzing this statement of injuries inflicted by the rail-
roads, they are brought down to — 1st. The injury to the jobbing

trade of New York City ; 2d. The loss to the merchants of this
City by the present method of sending articles of export to foreign
countries.

The first charge attributes the removal of the jobbing trade
westward —

1st. To the railroad companies affording facilities to Western
jobbers they do not to New Yort shippers, and to the discrimina-
tion in rates between large and small shippers, thereby preventing
the small Western dealer coming to New York to purchase.

2d. To the discrimination of rates in favor of other cities on ac-
count of less distance.

In all this there is evidently no truth. One cause of the removal
of so large a propo^■tion of the jobbing trade from the City of New
York is, in effect, one that inevitably follows the creating of new
centers of trade, due to the increased distance of a large popula-
tion from the City of New York and their necessities. This result
is on the same principle that makes country village stores and
town stores. Every new settlement has its center stores and
shops, and as the settlements increase and spread into large num-
bers of people, so do the centers of trade and traffic increase.
Then, too, centers of trade are made generally where the producers
dispose of their products. These facts illustrate the progress of
trade in the west, and large centers are increasing. The smaller
storekeeper can purchase all he wants nearer home ; the larger
merchant will be supplied with goods, etc., where he sells the pro-
duce, and thus the building up of great commercial centers in the
West is inevitable. New York has lost a large part of this job-
bing trade, but it was not due to the railroad companies. The
loss of the passenger travel, due to the formation of these new
trade centers, has been felt quite notably by the railroad com-
panies.

Another influential c.iuse of the decreased jobbing trade of the
City, which the members of the " Chamber of Commerce " must
understand, is due to the changing method of the business of dis-
tributing general merchandise. The position of a jobber is pecu-
liar to this country, and arose from the necessity that some par-
ties in the Eastern cities should collect and bring together several
lines of goods, wares, etc., for the coi;iV(mience of the purchasers
who would buy less than a package, a bale, or a box of any article,
and the business grew to be enormously large in this City, because
the merchants of this City could offer superior inducements to pur-

chasers on account of their control of the importing and manufac-
turing interests of the country, and the advantages of the City as
a distributing point. The jobber is an intermediate between the
manufacturer, the importer, and the smaller store-keeper. But as
the country has grown in population, and large cities have been
built, the business of the distributing-stores of those cities has
grown sufficiently large to enable their owners to purchase directly
from the manufacturers, their agents, or from the importers, and
thereby save the profit which the jobbers heretofore received, and
from which profit or tax the consumers are relieved wherever such
stores exist. But the main cause of the removal of the jobbing
trade westward, or rather the action that made it successful, was
due to the establishment of Government custom-houses in the
Western centers of trade. To the operation of these causes,
which are yearly becoming more extended in their influence, is the
loss- of the jobbing trade of this city to be largely attributed.

Then, too, that the loss of the jobbing trade was not due to the
" discrimination " in favor of other cities is clear, from the fact
that their jobbing interest has not increased, but has fallen off,
quite in proportion to that of New' York City.

The members of " Chamber of Commerce " of the City of New
York must understand this subject better than the Committee who
prepared the address. It is sad to see a body of intelligent men
in the position that this address places them, complaining because,
by the laws of trade and tlie action of the General Government
which neither they nor the railroad companies could control, the
City has lost part of its jobbing trade.

Their position is made no better in their second complaint :
that the exports of grain, etc. do wot pay them their former com-
missio'is, and. that they would rather have a smaller trade and
share in the distribution of it, because it would be more remuera-
tive.

There is no doubt that the method of conducting the export
business is changing continually ; that the days of warehousing
and frequent handling of grain, and charges for weighing or meas-
uring, cooperage, etc., and large commissions are nearly past. It
is undoubtedly true that vessels come to the wharves of this City
and port, and are loaded with grain, etc., paying but a email
brokerage to any one, and probably not a cent of commission to
any merchant in New York ; and that the former profit on fitting
out ships is almost gone. But who is to blame for this ? True,

the railroads made it possible, but which is better for the country,
to have no railroads, and to have no exports, or that these mer-
chants should lose their profits ? Here, again, the laws of trade come
in to regulate business, and if the New York merchants are losing
their commissions and other charges, the railroads cannot come to
their rescue, nor can the Legislature, to whom they appeal tor re-
lief. It is entirely beyond the power of the railroads either to
prevent merchants opening great distributing stores in the West
or to force the merchants all over the country to come to New
York to purchase their goods. Neither can the railroads force
shippers by their roads to pay New York merchants commissions
they do not earn.

The direct tendency of the Western trade is toward the abandon-
ment of their purchases of supplies in the Eastern cities, and to
dispose of their productions as directly as it may be possible to
the consumers without the intervention of unnecessary agents in
those cities, and therefore, so far as exports to foreign countries
are concerned, to use the Eastern and Atlantic ports as stations
only for transferring the freight to steamships.

It would be far wiser and more prudent for the members of the
Chamber of Commerce to recognize the facts that the losses of
trade have seriously affected many of the former sources of
wealth to the City of New York, and in place of hunting around
to find some party to lay the blame upon, for them to arouse,
and, by other means, make up for the loss of these elements of
profit.

It is far better for the interests of the merchants of this City
to secure all the business they can, than to lose what may be re-
tained because they cannot control the whole business of the
country.

The present and attracted capital, making this City the money
center of the country ; the extent and concentration of the com-
mercial and financial exchanges of the country in this City ; the
ability to retain the major part of the importing trade, securing
the sale of the finer and mote expensive goods, with a greater
variety than any other city can afford to keep ; the widening in-
fluence, through the railways of the retail trade ; the use of their
port for the greater part of the importing and exporting trade of
-the country ; the great value arising from its position as a dis-
tributing point; its attractiveness to travelers as a temporary
home, and to the more wealthy, refined, and cultured as the choice
city on this continent for the indulgence of their peculiar tastes
11

and fancies ; these are all elements of profit that may be retained
by the merchants of the City of New York.

The object of this paper has been to fairly meet the questions
that are involved in the resolutions committed to your Honorable
Committee for examination.

The management of the companies represented by the under-
signed fully recognize their dual relation to the State. First, as,
in a broad sense, public corporations, subject to such legislative
control as may be necessary for the protection of the people, for
their information as to the workings of this important institution
in its elements of developement of traffic and cost thereof, and yet
may not confiict with their chartered and other rights ; that their
duties to the public are of an important character ; that very much
of the prosperity and comfort and social happiness of the people
of the State of New York depends on these companies being judi-
ciously administered ; that on the results of such administration
depends largely such an extension of the railway system as will
furnish all the facilities required by the people of this State for
the transportation of their persons, their productions, their mer-
chandise, their supplies, and their property. Secondly. As private
corporations, having valuable franchises derived from the State,
with' certain powers and privileges to manage their property and
collect tolls on the transportation of persons and property. In
this last respect they claim the same protection from the State
that is willingly and rightfully granted to other corporations or to
the private citizen.

That there should be great differences of opinion between the
parties using the railroads for the transportation of their persons or
their property, on the one hand, and the persons charged with the
management of the railways, on the other hand, as to a proper
adjustment of the schedules of rates, is but natural. It arises
simply from a desire on the part of the customers to secure the
services of the railroad company at the lowest possible rates, and
on the part of the railroad managers to properly protect the in-
terests of the shareholders.

Again, that whole districts, and even large sections of country,
should feel themselves aggrieved by such adjustment of rates as
appear to and do operate against their interests in certain lines of
production and manufactures to which they have been accustomed,
is equally natural. An effort has been made in this paper to meet
these questions, and to state the laws of trade which influence the
decision as to rates, over which — under the circumstances of the

ease, witli strong rival roads in adjoining States on either side —
the companies we represent have no control. It has been our aim
to show distinctly and clearly how these laws, under the existing
conditions, operate to determine the differences between the
through and local rates, and how injurious to the interests of the
people of the City and State would be any interference with the
free action of the companies in meeting the competition of rival
lines interested in building up rival cities and States.

The inequahty of advantages, as between localities, that it is
sought to avoid always exists, independent of the influence of rail-
roads, and whilst it is impossible wholly to remove these inequal-
ities, no influence is so potent in lessening them as that of rail-
roads.

It has been our aim to explain how, under such laws, the ques-
tion of local and through rates must be considered as separate
and independent questions ; while, at the same time, by the in-
troduction of local competition between the roads we represent
and other railway companies not interested in the competition for
Western traffic, the people of Central New York are protected
from imposition or unfair treatment in these local rates.

We have shown that the criticisms ou the classification of rates
is at most but a question of opinion, and on this subject we as-
sume to be better judges than our critics, who cannot but be in-
fluenced in their judgment by their personal interests in securing
to their different lines of business special advantages. The proper
adjustment of classes of freight and of rates is one of great diffi-
culty, and requires the experience of experts, long and thoroughly
trained to such duties, and free from the bias of personal in-
terest.

We have shown, as to charges of personal interest in the details
of the management of the railways, that such details belong to the
shareholders, and not to the Legislature, or to parties not inter-
ested in the companies, and that the public do not suffer there-
from if such interests exist, because rates are determined without
reference to such interests.

We have explained the reasons which induced us to yield to the
Pennsylvania Eailroad and the Baltimore & Ohio Railroad Com-
panies the apparent advantage of a small difference in rates
between the freight centers of the West and the cities of Phila-
delphia and Baltimore — such difference being founded upon a well
grounded belief that the advantages of the port of New York will
more than counterbalance any advantage such difference may

contribute to the commerce of those cities ; and further that with
a right conception of the proper limitations to competition, in
accordance with the views that prevail among the business men of
the City of New York, it was hot right that we should inflict great
injury on the property of the parties whose interests we represent
when there was no prospect of success in such competition, and
without any adequate returns to be derived from it.

In considering all questions of rates, whether local or through,
their classification, the differences arising from quantity or volume,
and the time of delivery, the attendant risks, etc., we have shown
that we are governed by the same rules that influence all prudent
■ men in the management of their business, our object being to
make the property we control profitable to the owners thereof,
and that can only be effected by a just treatment of the customers
and patrons of those roads. It is directly to oar interest to
develop the resources of the country- reached bj' our main lines
and branches, that its population may grow in numbers and
wealth, and thereby the traffic on such roads be increased.

In this interest of the railroad companies the people have the
strongest possible assurance of a just consideration of their
interests.

We have discussed the injurious effect on the interests of the
people of this State of the passage of any law that should either
fix a proportion between the local and through rates or place the
railroad companies in any position wherein they would be hampered
or fettered in their competition with the other trunk lines. That
it is to the direct interests of the railroad companies to secure the
largest amount of business, whether of freight or of passengers —
the lowest cost of transportiou being reached only when the road
of a company is worked to its maximum capacity. The cost of
the additional rolling stock being in small proportion to the cost
of roadway, superstructure, stations, machine-shops and their
machinery, etc.

We have clearly demonstrated that the railroad companies we
represent have no power to control and save to the City of New
York the jobbing trade, nor to its merchants their former commis-
sions and profits on the traffic that passes through this port to
foreign countries.

We have also endeavored to make clear to your Committee
that neither the through or local rates are determined by the
amount of the capital cost of a railroad, and have fully shown

the workings of the laws of trade to prevent such a determination
of rates.

Tlie undersigned are also fully aware and freely acknowledge
that there are great evils arising from the absence of a proper'
limit to competition and the abuse thereof, and that unnecessary
injury is thereby done to the interests of many people, to large
sections of this and other States, and to the owners of railroad
property ; but they as strongly assert that the rectification of such
abuses, and the preservation from the injury inflicted upon indi-
viduals and communities, is beyond their jaersonal control ; that it
is equally beyond the power of the Legislature of the State ol
New York, or of Pennsylvania, or of any other or of all the States
to control The abuse of a proper principle, and the injury to the
people, is as broad as the nation, and unless there is some power
in the National Government, and some way by which such abuse
and injury can be rectified by the Congress of the United States,
there is no remedy, and all persons, communities and States must
accept the position and wait for time either to furnish a remedy
or permit the great laws of trade, now trammeled by destructive
competition, to work out the result.

Further, we do not acknowledge that there exists in the public
mind a feeling that the companies we represent have been guilty
of such management of ihose properties, as it affects the interests
of the people of the State of New York, to warrant the gross
charges of the address against the integrity and honesty of their
managers, or to warrant the threat in the address of the Chamber
of Commerce that " if the railroads chartered by this State refuse
to do justice to the public, the merchants and real estate owners
of New York City must join hands with the producing, manufactur-
ing and mercantile interests throughout the State in an effort to
compel them to do so ;" and we unhesitatingly assert that what-
ever of such feeling, if any, does exist, it has had its origin and
support from the efforts of men who were either ignorant of the
subjects of which they assume to become instructers, or were in-
fluenced by baser motives. No judicious or prudent man, and no
man with a proper self-respect, would be guilty of recklessly mak-
ing charges against the integrity and honesty of other men
without first carefully and intelligently examining into their truth.

In this connection it will not be out of place to further exem-
plify the' great wrong done to private reputations in the address,
than by calling your attention to the grave charges made by the
Committee against the honesty of the managers of the two cor-

porations we respectively represent, and that, when the grievances
they complain of are fairly brought to light, they are of a character
that our corporations cannot in any way control.

The Committee who presented the address which has been herein
reviewed, must accept the position in which this answer places
them, for it must be acknowledged that, owing to the loose way in
which members of mercantile bodies permit the individual mem-
bers thereof to misuse the position and influence of such bodies,
the Chamber of Commerce of the City of New York cannot be held
responsible for the gross and unfounded charges in the address,
but only for its serious neglect of properly controlling the utter-
ances of its representatives.

We exceedingly regret to be forced to the conclusion that the
essence of the attack on the railroads in this address is an endeavor
to force the shareholders of the railway companie,s, through public
opinion or by legislative action, to contribute more than their
share in supporting the mercantile and shipping interests of New
York City, and thereby to supplement the lack of enterprise and
business foresight which is practically acknowledged in the address,
or to gain an undue advantage over the shareholders of such com-
panies by the use of their capital without proper remuneration.

The railroad companies stand prepared to make heavy sacrifices
to sustain the business and commercial importance of this City.
Let the merchants, shippers, dealers and manufacturers under-
stand that the fullest and freest development and movement of
production in the country is their true interest, show equal energy
with the railroad management, and acknowledge that in so far as
such development is accomplished by the transportation service,
such service is entitled to its reasonable compensation equally
with the other services contributing to the development, and there
will be no dispute as to whom is due, not the loss of trade, but the
large increase thereof in the City and port of New York.

The undersigned, in addition to the above expression of our
opinions on the questions referred to your Honorable Committee,
will be very ready to furnish you with any further information you
may desire as to any or all matters connected with the policy or
the management of the railroad corporations we represent.

And beg to remain, very respectfully,

"W. H. Vandebbilt,
President N. Y. C. & E. B. R. R. Co.
H. J. Jewett,
President New York, Lake Erie & Western R. R. Co.

Windsor Hotel, 1

New York, Saturday, May 3, 1879. j

The Committee met at 11 o'clock a. m., and was called to order
by the Chairman.

Present — All the members of the Committee, except Mr. Wads-
worth.

The Chairman — Gentlemen, a week ago last Wednesday I wrote
a letter to Mr. Sterne, asking him when the parties who had asked
for this investigation would have their case sufficiently digested
and prepared to submit evidence. I, at the same time, directed
my clerk to send a copy of the letter to the Chamber of Com-
merce and to the Board of Trade and Transportation, which, it
seems, he neglected to dp. Mr. Sterne received the letter in due
course, and this morning informs me that he has been engaged in
a protracted trial, day in and day out, so that he has been unable
to reply or give the matter any attention. At a meeting of the
Committee, held on Wednesday last, it was found that we could all
be present in New York to-day — or it was thought we could at
that time — while it would be impossible, perhaps, on next Satur-
day. For that reason a meeting was called, and the Chamber of
Commerce and Board of Trade notified by telegraph. I received
a telegram from Mr. Sohultz, suggesting that certain parties be
subpoenaed here to-day, mentioning their names ; and not know-
ing but it would be desirable to subpoena them with documentary
evidence, I prepared the subpoenas and prepared the authority to
any one to serve them. They were brought down here last night
by a member of the Committee ; but, in the opinion of Mr. Sterne,
the parties cannot be prepared to submit evidence without, as he
expresses it, at least two weeks' careful study and preparation.
Se made that suggestion in regard to oral evidence. I do not
know whether the parties present are prepared to proceed to the
taking of testimony to-day or not ; if they are, we are prepared to
hear them ; but I thought that these circumstances, which I deemed
it proper to mention, might excuse their not proceeding with
testimony.

The members of this Committee are occupying a position wTiich
they have not sought, and are appointed for the purpose of de-
veloping a fund of information in regard to which they have no
special familiarity. There are four lawyers on the Committee, and
yet it would be impossible, I take it, for any of them to conduct
the- examination necessary to develop the information sought, and
do it in a proper and systematic maimer. If a man is to try a case,
he wants first to become thoroughly familiar with the evidence to
be produced and then consult the authorities and the law bearing
upon the questions under consideration, in order that he may be
ready to proceed with the trial, be it severe or be it what it may,
when he commences. Now we intend to throw the responsibility
of the success or failure of this investigation upon you, gentlemen,
representing the Chamber of Commerce and the Board of Trade.
Although it is something in which the State at large is interested,
and has been generally asked for throughout the State, it has been
especially asked for by you. We intend, as I said before, to make
it your responsibility, and we intend to give you a full opportunity
to make your case. We do not want to restrict you in any proper
particular ; at the same time we have the fear that the report may,
in certain contingencies, be so cumbersome and volumninous as to
fall from its own weight. We want something that, when we get
through, people will read and weigh and listen to. In order that
the matter may be so presented, we deem it of vital importance
that the case be prepared under the direction of thorougly com-
petent attorneys, and, under their direction, submitted to this
Committee. The Committee are disposed to do everything in
their power to carry out to the fullest extent the instructions of the
resolution of the Assembly appointing them. As I said before,
they must necessarily be incompetent to perform certain parts of
this work. I take it that the greatest service we can perform to
you and to the State is, to afford an avenue through which to lay
before the people an authoritative statement of the existing state
of affairs upon this subject. The gentlemen who appeared before
this Committee in Albany, gentlemen who are particularly inter-
ested in this subject, are specially familiar with it ; but I think
that the case should be thoroughly analyzed and systematized,
and jiresented in some such shape as this :

First. The discriminations against individuals.

Next. As against localities.

Next. As against the State.

Next, perhaps, the general relations of the railway to the
public.

I make this remark merely as suggesting an idea, not suggest-
ing anthing which would, perhaps, be desirable to follow. I think
it should be arranged, and in this arrangement the assistance of
competent counsel I deem, and we as a Committee, deem of the
utmost importance. There are 5,565 miles of railroad in the
State, and what constitutes a grievance in one locaUty may con-
stitute a grievance in very many localities. While we do not want
to restrict the investigation in any respect, yet we do not want
cumulative evidence. It will be seen, by the reply which the two
leading railroads of the State have made to the charges and speci-
fications 'placed before the Committee, that they admit some of the
charges that are made and proceed to justitiy them. The Com-
mittee, in considering this matter, h;ive deemed it well to sugojest,
that instead of seeking to prove the exact state of affairs through-
out the State, a case be made by developing the state of facts upon
certain test points— for instance, between Chicago and Boston
points, Chicago and New York, Chicago, Baltimore and Phda-
delphia — in a genera! way ; and then take Buffalo and New York,
Rochester, Syracuse, select certain localities, which the parties
asking this investigation are satisfied will develop the whole case,
and stop with that. Has any member of the Committee any sug-
gestions to m ike, generally, in relation to this matter ?

Mr. Terry — I think what you have said covers the views of the
Committee.

Mr. Jackson S. Schultz — Mr. Chairman : I would say, in be-
half of the Chamber of Commerce, that I received no notice except
a telegram, a very short letter, yesterday, and the question of
counsel is a new one which I have no doubt our Committee will
fall into at once and be perfectly acceptable to them. The facts
were so well known to some members of the Committee that they
had hoped to avoid that expense and that delay, because counsel
sometimes are very tedious ; but they accept the suggestion and
see now very clearly the importance of employing counsel, and I
have no doubt at your next meeting, whenever that may be, we
shall appear by counsel. You have already had suggestions as to
the subpoenaing of certain officials of the Central road, and we
were prepared to go on to-day with those officials ; but as they
have not been subpoenaed — and of course they would want to
look at their books and fortily themselves in the statements they
12

might make from those books— they would perhaps think the
time too short. Of course, I see that difficulty. If the Com-
mittee desire to adjourn this matter for a week or two, it having
been suggested that Mr. Sterne will appear in behalf of one of
the commercial bodies, perhaps the Chamber of Commerce would
feel called upon to employ counsel to meet him and proceed de-
liberately, and perhaps time would thus be saved as you suggest.
The answer that has been made by those two gentlemen to our
first indictment would seem to indicate that it will not be safe for
us to rely upon one or two or three or half a dozen cases,
because they admit as much as that, I judge ; but they want to
know as to the general policy. Now, it may be necessary for us
to show, unless the Committee should indicate difi'erently, what
the general policy is by evidence from every town in this State at
non-competing points. We do not have any apprehension at all
about our ability to establish every fact we have stated in that
communication which we made to you at Albany. We have not
the slightest doubt on that subject ; but it may be necessary — and
I think our Committee this morning have concluded, after what
they have heard, that it would be better for us to employ counsel
to present the facts in a different form somewhat from what we-
had intended originally. We know the power of corporations ;
and I wish the Committee to understand this : it is difficult to get
men to come here and testify against those corporations, when
those corporations have it in their power to absolutely ruin them.
There is scarcely a manufacturer of any material living along the
line of any railroad in this State who cannot be ruined by a rail-
road, if they so choose. They are entirely in their power. We
shall have to meet that difficulty, of course. They will give us
the informotion, but it will be with the understanding that it is
not to be. known as coming from them. I believe, however, we
shall be able to pet courageous men enough to appear and bring
these facts to your knowledge, so that you will be able to say that
the principle that we have contended for is established. I have
' no doubt of the matter. I do not now wish to go into the subject.
If the gentlemen of the Committee choose to adjourn for any
given time, we shall acquiesce. We did suppose that you would
go on to-day with the Central road, but their counsel is not here —
I understand they are to appear by counsel — and the witnesses
are not here, and I suppose they have not been subpoenaed.
Mr. Terrt — I do not see how it can be done to-day.

Mr. SoHULTZ — We are willing to fall into any suggestion you
make, and when you come together again, whenever you choose,
we shall have counsel present, and proceed in such way as you
have suggested. We think perhaps on the whole that is the best
way. We wish to say distinctly that as individuals we do not feel
any grievance. If we have grievances, we are not letting theni
appear prominent. We are speaking on behalf of the public ; and
if at any time during this investigation we should show any feel-
ing, it is not the feeling of individuals, but it is the feeling that
the whole community feel on this subject. I hope that before we
get through we shall give the distinct lie to some of the insinua-
tions in that memorable letter of those two very eminent gentle-
men.

The Chairman — I think I distinctly stated that it was not the
purpose of the Committee to limit or hamper the investigation,
and the suggestion as to selecting test points was made with the
idea that you might show a general policy in that way. Of course,
if it is desirable to make it more extensive, you will be permitted
to do so. As to one other remark you made, in reference to the
annoyance of counsel, I do not want to be understood as saying
that the Committee propose to place themselves in the hands of
lawyers altogether. We intend to retain control of the investiga-
tion, although we want lawyers to do what we think that we are,
and from necessity must be, incompetent to do. We want their
aid and assistance. We do not intend to let them impede the
investigation ; and I am> afraid that without a careful preparation
it might drift o£f into side issues, apart from the main issue and
the main object that we wish to accomplish. The Committee in-
tends at all times to retain control of the investigation and of the
examinations, both direct and cross.

Mr. ScHULTZ — Mr. Chairman : I would like to say that at a meet-
ing held day before yesterday Mr. Thurber was elected chairman
of our Committee, as I have to leave town in a day or two for a
couple of months. The Committee have elected Mr. Thurber
chairman, and any communication that you have to make here-
after, if you make it to him, he will respond in behalf of the Com-
mittee ; and I would be very glad if Mr. Thurber would take
charge of it from this time forth. You can communicate with
him.

Mr. Fkancis B. Thurbee — I may say, Mr. Chairman and gen-
tlemen— as chairman pro tern of the Committee, on account of the

expected absence of Mr. Schultz — our real cliairman, Mr, Charles
S. Smith, has been away in Europe for some time- We expect
him back very soon, and he will probably then take charge of the
business of our Committee ; but I shall endeavor to do what I can
to get the routine work under way. As regards the general sug-
gestions which have been made, I suppose that the time to which
the Committee will adjourn will depend very much upon the pro-
grei-s of business io the Legislature. The last days of the Legis-
lature are, of Course, always very busy ones. I do not know what
the views of the Committee are in regard to meeting before the
session ends, but I should presume that there will be a constant
accumulation of work before the members of the Legislature, and
that it will require closer and closer watching all the time. We
shall endeavor to be ready, however-, at such time as may suit the
Committee's convenience, and will do our best to bring out the
points which are of interest. I also want to re-iterate what Mr.
Schultz has said in relation to the feeling that we have in this
case ; that it is altogether too large and too important a matter to
allow liny personal considerations, either on the part of the rail-
road managers, or of the merchants who have given some attention
to this thing, to enter into it. It is a question in which the public
are greatly interested. It is a question which concerns every
piece of real estate in the whole State of New York, and it con-
cerns intimately the commercial business of the State. How
large the scope of such an investigation will be, must of course be
determined by the Committee ; but I do not think that it will be
ended before the whole general subject of the relations of railroads
to the public will be considered. The answer of Mr. Vanderbilt
and Mr. Jewett seems to indicate that ; and if that be so it will be
one of the most important trials that has ever been known in the
history of this country. So far as the individual interests of any
one man are concerned, they have got to stand aside for the great
public interest. While the merchants may not be superior to the
frailties of human nature, we do not mean to be unreasonable in
our views. We do not wish to say the right is all on our side ; we
do saj' that we want to have the question as thoroughly elucidated
as possible, to enable the Committee to arrive at a fair judicial
decision. So far as the amount of preparation is concerned,
which may be necessary to make a good beginning, the Committee,
are, perhaps, the best judges of that, and we will accommodate
uurselves to their views.

The Chairman— We had that from the experience that we
have had in the preparation of other cases. As to the time of the
next meeting. We are in session now in the Legislature from ten
until six or half-past six o'clock every day. It is impossible for
us to hold any meetings, except it be on Saturday, and with that
amount of time consumed in the sessions of the Legislature in
connection with committees, we feel very much inclined to do as
little extra work on Saturday as possible. Probably we cannot
meet until after the adjournment of the Legislature, which will
take place from the fifteenth to the twentieth of May, I presume.
After that we shall all require a little vacation, in order to attend
to our business matters at home, and then I believe it is the pur-
pose of the Comrcittee, as soon as the Legislature shall have
aajourned, and we shall have had a reasonable opportunity to
attend to home matters, to come to New York for the purpose of
holding a protracted session, and proceeding with the investiga-
tion. When we arrive at that time we want everything in the
nature of preliminaries settled, so that we can go right at tbe
solid work of the Committee. It will be impossible at this time to
fix a day, but the time must necessarily be a month or more
ahead.

Mr. Low — Some time about the first of June ?

The Chaikman— Yes.

Mr. ScHULTZ — It would facilitate our work somewhat if you
would indicate to us whether you propose to hold sessions at
other places than New York, and if so, where ; because if we had
important witnesses, for instance, at Syracuse, they might prefer
to come to New York rather than to go to Saratoga, or some other
point. If you could indicate to us the different places that you
would be willing to meet, it would facilitate matters very much.

The Chairman — Mainly in New York.

Mr. ScHULTZ — Then if we have witnesses from the western part
of the State, you think you would rather have them come here
than to meet them at Bufialo ?

The Chairman — My impression is, although we have not con-
sidered that in the Committee, that it may be necessary for the
Committee, perhaps, to go to those different points, like Buffalo,
Rochester and Syracuse during the investigation. But I think the
general purpose of the Committee is to come to New York and
conduct the examination here, so far as we can.

Mr. SoHULTZ — You would regard it as desirable that all the
witnesses possible should be brought here ?

The Chairman — Yes, sir.

Mr. ScHULTZ — GeDtleniBn largely interested living in those
western towns might desire to be heard at home.

The Chairman — When they get once started on the train ii is
not much further to New York.

Mr. John F. Henry — Mr. Chairman : In behalf of the New
York Board of Trade and Transportation, I can say we intend to
co-operate with the Committee of the Chamber of Commerce in all
essential particulars, and we* hope to have present Mr. Simon
Sterne, who is a member of our body, and has given this matter a
great deal of attention, who has traveled in this country and in
Europe, and investigated matters in Europe largely, connected
with the question, and we believe that we shall be able to make
every allegation that the Chamber of Commerce brought forward
perfectly familiar to the Committee, and to the people throughout
the State. We want to say, as has been intimated, that we make
no warfare on the railroads, as such. We claim that the true in-
terests of the railroad companies is our interest ; and we claim
that we have their true interest at heart. We do not think it is
for their interest to make these combinations in such a way as to
discriminate against the people in the State of New York, espe-
cially the City of New York, and we know it is not for our interest.
We believe if the railroads had consulted the interest of the mer-
chants of the State, the people of the State, instead of their own
combinations and the tricks that they have resorted to, it would
have been better for all concerned, and better for their own inter-
est. We simply say that the New York Board of Trade and
Transportation are in hearty sympathy with the Chamber of Com-
merce; and, so far as we know, the merchants of the City, in all
the different organizations, the Produce Exchange, the Cotton Ex-
change, the Grocers' Board of Trade, and every other organization
feel the same as we feel. Many of the members of the New York
Board of Trade and'Transportation — we have over eight hundred
members — are members of other organizations. The same is true
of the Chamber of Commerce. Some are members of both or^ ani-
zations. There will be no clashing of interests here, and we will
try and make the examination, so far as the merchants of New
York are concerned, as short as possible, consistent with truth.

Mr. DUGUID — Mr. Chairman : It strikes me there is one point

that has been suggested, about the meetings being held at Ne-w
York, that ought to be modified somewhat. I apprehend that
there will be considerable testimony that will be wanted, for in-
stance, at Rochester and at Buffalo, and I think also at Syracuse,
perhaps. There are places all about there, and it has been sug-
gested that possibly some evidence may come from the different
towns, smaller towns throughout the State. If you locate the
Committee for one session, for instance, at Syracuse, you will
reach Rome and Binghamton and Utica and Oswego, and then if
you go to Rochester you will reach a number of places about there,
and the same at Buffalo. It seems to me that it had better be
understood that either the main Committee or Sub-committees
will be ready to take evidence at those places.

Mr. Bakek — Mr. Chairman, I desire to say, with reference to the
question of holding sessions in other places in the State, that I
think it is rather expected by the Miller's Association, the head-
quarters of which are at Rochester, the officers residing there,
that they will have an opportunity of presenting evidence at that
place. To illustrate, as I have understood, they claim the fact
that existing discriminations have had the effect to destroy milling
interests completely, to wipe out large and prosperous mills,
which have been converted to other uses. To get at all these
facts, and to have them appear to the Committee, I think they
desire and expect that a session should be held at Rochester
during the year.

The Chaibman — I so understood it ; but the remark that I made
had special reference to the case that we expected the Chamber
of Commerce to submit here. The auxiliary evidence that will
come from other localities, we can go there to take ; but the main
case, as I had understood it, would be presented by the Chamber
of Commerce and the Board of Trade and Transportation here.

Mr. ScHXJLTZ — I would ask you whether you would not expect
the counsel to be employed here to follow the Committee and pre-
sent all evidence m a uniform manner ? Would not our counsel
be required to go to Rochester and Buffalo, in order to make the
thing consistent ?

Mr. Bakee — It is desirable, of course.

Mr. ScHULTZ — I think it is very desirable for the Committee to
indicate in some official way, how far they propose to travel over
the State ; how much they propose to concentrate their inquiry,
that is, as to the locality, because I know men who will come from

the Erie road for instance, Binghamton and other points along the
Erie road, who have complaints to offer, and they will be very
glad to come here, if you do not go there.

The Chairman — I think that as between the Committee travel-
ing and the witnesses travelling, the witnesses better travel. I
think it is policy, and from very many different stand points, so
far as possible, to make this our headquarters, and to conduct the
investigation from here ; but I am aware, as suggested by Mr.
Duguid and Mr. Baker, that there is an expectation that we will
go to those different points and take some testimony, and we may,
at any time, go, or we may, at any time, send sub-committees to
take testimony by commission, as is desirable ; but that this will
be the base of operations throughout. I think this is the general
understanding.

Mr. Chahles Watbous — Mr. Chairman, in consideration of the
comfort of the members, I hope you will select some place further
down town for your meetings — some hotel or such other place as
will be furnished down there. The railroads are run whether
their witnesses or lawyers are in attendance or not, but it is not
so with the merchants. A great many of them have business that
will not run without their y)ersonal attention. It is a long ways
from the business centre of the town to this point, some four or
five miles. A great many of us would like to be in a. tendance
during the entire session of the Committee. We shall divide our
time in that respect so as to have some one present all the time.

Mr. Henry — Some of us reside in Brooklyn.

Mr. Watkous — Yes, some of us reside in Brooklyn, and it is
very hard to get business men to come up as far as this. There
is a room at the Municipal building on Madison avenue, that the
Committee could have if desirable. As the Committee has to
come to the City of New York, we suppose it is immaterial to
them to what part of the City they come. We, on the contrary,
have business centered at certain portions of the City. If the
Committee consult our interest at all, I think they will see the
point I make. It would be very much more convenient for wit-
nesses and parties and counsel to have the sessions of the Com- -
mittee down town. As I say, railroads run all the time, but it is
almost impossible to run a business like Mr. Thurber's, for in-
stance, when he is away from it. I make that suggestion.

Mr. Henry — You can have the New York Board of Trade and
Transportation rooms down town.

Mr. Thuebeb--! think it is quite proper that the Copamittee
should choose tbe placje where they will meet.

Mr. DuGDiD — This is a matter of very grave importance, as is
stated here, and if the merchants and business men thtoughout
the City and throughout the State and country, as well as the
whole public, are as interested in this question as we think they
are, certainly they should be willing to present their evidence before
this Committee if we are located anywhere in New York, and it
ought to be considered entirely reasonable. I have no choice
myself. I will go anywhere that the Committee may determine.

Mr. Baker — Mr. Chairman, I think this is an application on the
part of those gentlemen, who have witnesses, to produce, to
change the place of trial for the convenience of the witnesses, and
and it seems to be evident that a great many of the witnesses will
be found in the lower part of the City. I expect the Committee
will consider it fairlj'.

Mr. Depew— Of course, so far as our witnesses are concerned,
it would be much more convenient here than any spot that could
possibly be had ; but we have no objections to going to any cen-
tral point where all can be best accommodated. We have no
desire in this matter except to get out all the facts from all
sources.

The Chaieman — Gentlemen, we will give you timely notice of
our next meeting, and we will listen to any communication in re-
lation to subpoenaing necessary witnesses to be examined at that
meeting. We will fix upon that time when the adjournment of the
Legislature takes place.

Adjourned.

TESTIMOISTY.

New Yoke, June 12, 1879, 11 A. m.

The Special Assembly Committee on Eailroads met at
Municipal Hall, and was called to order by the Chairman.

Present : Messrs. Hepburn, Husted, Duguid, Grady, Noyes,
Wadswoeth, Baker and Terry.

Mr. Simon Sterne appeared on behalf of the Chamber of
Commerce and the Board of Trade and Transportation of New
Tork.

Messrs. Chauncey M. Depew and Frank Loomis appeared
on behalf of the New York Central & Hudson River Rail-
road Company.

Mr. W. D. Shipman appeared on behalf of the New York,
Lake Erie & Western Railway.

The Chairman — The Committee meet here to-day in pursu-
ance of the arrangemeots the Committee made b.efore the ad-
journment of the Legislature at Albany. We meet here for
the purpose of proceeding with the investigation which we
were directed to take up, and for that purpose a number of
subpoenas were issued some time since and given in charge to-
the counsel selected by the Chamber of Commerce, and a gen-
tleman authorized at their request to serve the subpoenas. I
understand the subpoenas have been served. For a further
statement of the matter we will listen to Mr. Sterne, who has;
charge of it.

Mr. Sterne — The subpoenas have been served on Mr. J.
H. Butter, who is General TraiSc Manager of the New
York Central Railway ; on Mr. Samuel Goodman, who is
the General Freight Manager, local points, of the New

York Central Railway : on Mr. Albert Fink, the Commis-
sioner of the truuk lines, who has his office here in the City of
New York ; on Mr. E. H. Walker, Statistician of the Produce
Exchange ; on Mr. E. C. Yilas, who is the General
Traffic Manager of the Erie Railway; on Mr. E. T. Low, who is
the Local Traffic Manager of the Erie Railway; ouMr. Jewett,
the President of the Erie Railway ; on Mr. Stephen Little, the
Auditor of the Erie Railway ; on Mr. McAlpine, a railway en-
gineer of considerable repute, who was at one time one of the
Railway Commissioners for the State of New York, under the
Act of 1854 ; and on two experts, accountants, Messrs. Robert-
son and Balch. These subpoenas were made returnable at
different dates. Of course we shall expect to serve others iu
the interval between this and Monday, for various days, de-
pending on the time the witnesses will take, because, knowing
these railway men, indeed, all whom we shall produce before
this Committee, are busy men, we do not desire them to dance
attendance here during the testimony of other witnesses and
wait for them to be examined. We, therefore, thought it would
be advisable to subpoena those witnesses just as we may re-
quire their attendance, and I trust the Committee will bear
me out in that.

Mr. Steene then made a statement of the facts which he de-
sired to show iu support of the charges preferred by the
Chamber of Commerce and others against the railroads, as
follows :

Gentlemen :

Acting on the suggestion made by the Chairman of
this Committee, to employ counsel, the Chamber of Com-
merce's Special Committee and the Board of Trade and
Transportation have united in requesting me to represent them
before you in investigating the abuses which have been devel-
oped in our railway system, and which, we believe to be of so
serious and gr'ave a character that they imperil the financial
and commercial welfare and supremacy of the City and State
of New York.

Our railway legislation is a development and outcome of a
sj'stem anterior to the application of steam to purposes of trans-
portation, and properly to understand it we must dwell for a
moment upon the conditions existing at the time when this

great revolutionizer of methods of transportation came into
being.

The ordinary highways or turnpikes, the natural waterways
and canals were the means of intercommunication of our peo-
ple ;~ of these the turnpikes and highways, were in part in
private hands and in part in the hands of the public ; and the
natural waterways and canals were of course public highways ;
Tvere then and are now the pro]Derty of the State.

Such of the turnpikes or highways which were owned by the
•counties and townships were free, such as had passed into the
bands of private corporations were under strict restrictions,
in relation to their use. The charges by way of tolls thereon^
ior their occupation by vehicles, animals, and foot passengers
were, by chapter 33 of the laws of 1807, to be posted, stating
•what it shall be for each animal, chariot, coach, wagon,
.stage, &c. And then it was provided "that if any toll-
gatherer shall unreasonably delay or hinder any traveler
or passenger at either of said gates, or shall demand
and receive more toll than by this act established, he shall for
each such offence forfeit and pay five dollars ;" and thea those
"Communists " of 1807, proceeded to enact " that the Legisla-
ture may dissolve the said corporation when the income arising
from the said toll shall have paid and compensated the said
corporation for all moneys they may have expended in pur-
chasing and making said road, together with an interest there-
on of ten per cent, per annum, besides the expense of repair-
ing and taking care of said road ; and thereupon the right, in-
terests and property of the said corporation shall be vested in
the people of this State, and be and remain at their disposal."

And it was further provided, " that no person being a di-
rector of said turnpike road shall, directly or indirectly, con-
tract for or be concerned in any contract for the making or
working of any part or portion of said road during the time he
is director as aforesaid."

In England, when the canal sytem, which was as great an
advance over the turnpike as the railway was over the
canal, first came into being, the canals were built by private
individuals and companies, and their charters contained strin-
gent provisions relative to tolls to be charged thereon for the
conveyance of boats. It will be remembered that the boats
did not belong to the canal company, but that the canal com-

100

pany furnished the waterway, and the boats were put upon
the canal by private enterprise and a fixed and definite rate of
toll to be charged upon this waterway.

(Here Mr. Sterne quoted at length in illustration of this fact
a provision stringently providing, with great detail, a tariff of
charges on an English canal as provided by its act of incor-
poration.)

This State, fortunate in having, in the early part of the cen-
tury, in De Witt Clinton, a far-sighted statesman; who g&w
that if canals were permitted to be built and owned by
private enterprise, the result would prove the creation of
monopolies in transportation which would tax the com-
munity at their will, insisted that the canals should,
be built by the State and remain forever the property of the
State. In this he was well seconded by Gouverneur Mor-
ris, who, as chairman of a committee, in 1811, reported to
the Legislature, in the following language : " They take the
liberty of entering their feeble protest against a grant to pri-
vate persons or companies. Too great a national interest is
at stake. It must not become the subject of a job or a fund
for speculation. Among many other objections, there is one
insuperable, that it would defeat the contemplated cheapness of
trarisportation."

Acting under the guidance of the pure and wise statesmen
who had charge of our State's early government, the Erie Canal
and its branches were constructed by the State to be, in the
language of the Constitution of 1846, " the property of the
State forever, and under its management forever."

Unfortunately, New York had no such far-sighted statesmen
when an improvement — the railway — came into existence,
which was infinitely superior to, and infinitely more capable of
general application than, the canal as a medium of intercommu-
nication ; so these improved highways were permitted at the
very outset to be built by private individuals, organized under
special acts of incorporation. Instead of building these roads
with the money of the State, the very reverse of the policy of De
"Witt Clinton was followed. Not only were they left to private
enterprise, but the State contributed by the loan of its own credit
and public moneys large sums to these early railwayprojects. To
the Erie Kailroad three millions of dollars were given, and $3,-
217,096.86 interest. To the Auburn & Syracuse, $Z00,000 ; to the

101

Auburn & Eochester, $200,000; to the Tonawanda, $100,000;
to the Long Island Eailroad, and interest, $108,882.49 ; to the
Schneetady & Troy Railroad, $100,000; to the Ithaca &
Owego Eailroad, and interest, $650,814.67 ; to the Canajo-
harie & Catskill Eailroad and interest, $380,000 ; the Hudson
& Berkshire and interest, $303,797.02. In all, $8,260,591.04,
of which the State received back the sum of $756,152.73.
Small as these figures now appear, tbey then formed a consid-
erable proportion of the cost of these roads.

In tbe early stages of these new roadways, they were re-
garded only as improved highways, and it was in contempla-
tion by the legislative bodies who chartered them, as well as by
those who received these franchises, that the province of the
company owning the road would be to build and construct
this highway in the same manner as it is the province of the
canal company to construct a canal, and that although they
might supply motive power, the cars and the business of trans-
portation that was to be done along the line of this highway
should be in the hands of private individii.als.

The early charters, both in England and in this country,
contained provisions analogous to those contained in the canal
companies' acts, by which persons and corporations other than
the company owning the line were permitted to run their own
cars over it on payment of certain tolls for motive power. All
the early acts contain carefully prepared schedules of both
freight and passenger charges down to the minutest details.
Thus, the fixing and regulating of freight, as well as passenger
charges, were not only not considered confiscation or invasions
of rights of property, but were necessary deductions from the
fact that tbe railways were regarded as improved public high-
ways, and that such conditions were, therefore, essentially
proper and inseparable from the concessions when made. As
au illustration take the Charter of the Ithaca & Owego Eail-
road :

" Sec. 12. All persons paying the toll aforesaid may, with
suitable and proper carriages, use and travel upon the said
railroad, subject to such rules and regulations as the said cor-
porators are authorized to make by the ninth section of this
act" (Laws of 1028, page 17).

And many of the early charters contain similar provisions.

102

There were also positive restrictions as to the rates of toll
to be charged and inhibitions on merging or consolidating
parallel or competing lines.

In a report made by a special committee of the Legislature,
in 1843 (Assembly Document No. 80), the following language,
unhappily unheeded and unacted upon, appears :

" Combinations and confederacies of any magnitude and ex-
tent, even among natural persons, are looked upon with sus-
picion, and except some good reason, not inconsistent with the
public good, and based upon necessity, is apparent for such
combinations and confederacies, public sentiment will not
tolerate them ; and every such combination and confederacy',
by which the rights of others are to be and may be injuriously
affected, is a misdemeanor, and punishable as such ; and the
committee can see nothing which should entitle incorporated
companies to greater confidence from the public or milder
treatment, when they, by their officers and figents, combine for
purposes which may, and to some extent must, necessarily
affect injuriously the public interest and well as the rights of
individuals."

The various links of what is know as the New York Central
chain and the New York and Erie Railway were first prohibited
by law from carrying freight in competition with the canal,
and were subsequently, by modification of their charters, com-
pelled to pay toll to the canal fund equivalent to what the
goods, had they been carried on the canal, would have paid to
the canal. In process of time this restriction was first modi-
fied and then removed in 1851, and the railways were free to
charge what they saw fit on freight.

The passenger traffic was, however, subjected from the out-
set to strict regulations, and the reason why the freight traffic
was not so subjected was because in the infancy of these
enterprises it was not supposed that the freight traffic would
be of any value to railway corporations, but that, on the con-
trary, if they carried freight at all, such carriage would be
confined to mere passenger luggage or articles of luxury which
could bear the expensive tolls which it was supposed that rail-
way companies would be compelled to charge as transporta-
tion rates.

It would have been regarded as the wildest sort of chimerical

103

and viRi(mary forecasting for any one to have suggested that
the time would come when 80 per cent, of the eastbound
freight, composed mainly of cereals and animal food, would be
transported by rail.

Ii\ a report made to the Legislature in 1835, by Messrs-
Jarvis, Holmes, Hutchins and Mills; then leading engineers,
to whom the Legislature of 18o4 confided the duty to report
on the relative cost of railways and canals, these experts say :
" The railroads admit of advantageous use in districts where
canals for the want of water would be impracticable. They
will probably be preferred wliere higii velocities are required
and lor the transportation of passengers, and under some
circuQistances for the conveyance of light goods."

Down to 1818 every railway charter was a special concession
derived from the Legislature in each particular case, and be-
fore the power of eminent domain could be exercised, to some
degree, at least, the Legislature had to be satisfied that the
enterprise was one of public utility.

The Constitution of 1846 required the Legislature to pass
general laws under which corporations shall be formed, unless
the object of the corporation cannot be attained uuder general
laws ; and as the special railway legislation was a source of
much corruption, it was deemed advisable to enact under this
constitutional direction a general railway act.

In 1818 an act was passed under which railway corporations
could bo organized, but which still provided that before the com-
panies could exercise the right of eminent domain they should
obtain a special grant of authority ) o th at effect f lom the Legisla-
ture. This law remained on the statute book just two years^
when a new law was passed to take its place — the General Rail-
way Act of 185'l) — which, with its amendments, substantially is
to-day the geiiei'al law under which railways of this State have
since been built, and under which, since its passage, all have
been operated.

State supervision and control as to passenger traffic was main-
tained, by § 28, the amount to be charged therefor was not to
exceed three cents per mile on all railways theretoforj chartered
and those forming under the act, but this law left the railways
without control as to the charges to be made on freight
which was rapidly growing into their more valuable and more
important traffic, and this was done under the impression that

104

the law of competition, which had proved so beneficent a con-
troller of men's rapacity, in the supply of almost all commodi-
ties and services, and which had in all othei* matters produced
the best possible and most beneficial results, would in this case
be also operative to secure the least possible rate§ of freight to
the consumer and the greatest .possible efficiency on the part of
the railways. This has, however, proved a mistake.

But even in the law of 1851 there is a faint recognition of the
duty of State supervision as to these corporations, and the possi-
bility that they may earn too large sums of money from the com-
munity. Section 33 provides : " The Legislature may, when
any such railroad shall be opened for use, from time to time
alter or reduce the rate of f i eight, fare, or other profits upon
such road, but the same shall not, without the consent of the
corporation, be so reduced as to produce with said profits less
tlian ten per centum per annum on the capital actuiUy ex-
pended."

It was not foreseen that the natural law of competitiou can-
not a]Dply to such a case, unless railways were multiplied
to such a degree, from any given point to an}' given point, that
they would be too numerous to combine, because possible
combination excludes competition. Further that competition
could come only from an expenditure of so vast a sum of money
that its investment was not likely to be made, was another
natural limitation to competition in this case, not thought of
by the framers of the law of 1850.

The economic law, that a service, which must be consumed
upon the spot, and the supply of which can be indefinitely ex-
tended by the same person, or clas- of persons, excludes coin-
petition, was also lost sight of ornot known. Hence, at the end
of almost thirtj years from the passage of the general railroad
law, we are confronted in this State — indeed in all the States of
the Union (which have more or less followed iu the wake of New
York in this particular) — with a railway problem of the first mag-
nitude, involving not only one, but almost all questions with
which other people have had to deal in relation to these cor-
porations, and which is the reason of your presence here and
my appearance before you.

The growth of the railway system within this period of thirty
years, since the passage of the General Eailway Act, has
been beyond precedent in the financial history of this

105

world. In 1845 the State of New York had 721 miles of rail ;
in 1S76, 5,550. In the United States the mileage in 1845 was
4,633; in 1877, 78,000 miles, with a nominal capital invested
of about 15,000,000,000.

In 18i5 the capital represented by the New York railways
was $18,000,000. The capital stock and debts now about
$500,000,000— an average cost of about $80,000 per mile.

The aggregate gross earnings of the railroads in New York
State in 1845 were about $2,0U0,(J00. The aggregate gross re-
ceipts in 1875 were about $70,000,000— now nearly $95,000,000.
This vast power has been permitted to grow up and over-
shadow almost every other interest in society, without any re-
sponsibility for its management to any one, except, as I shall
hereafter show, an illusory one to its stockholding interest.

The State has ceased to control it ; the stockholders have
practically ceased to control it. It constituted itself an im-
perium in imperio, overshadowing and overwhelming in its
character, permeating every county and every town in the
State ; employing the best legal and administrative talent
therein ; being the largest advertiser, dud therefore holding to
a considerable degree the press under its control ; exercising
an influence upon elections ; oft determining the committees of
our legislative bodies, and at critical moments determining
the personnel of our State Government.

That with a power so vast and so without control, great
abuses should have crept in, is but one of the manifestations
of that general law of society which couples unchecked exercise
of power with its abuse.

And here, before I come to state the special grievances which
have brought us together and upon which we expect to offer evi-
dence, allow me not only as to myself, but also as to the gentle-
men whom I represent, to disclaim absolutely and unequivocally
any and all personal feeling against the men who have control
of our great trunk lines of rail. Our quarrel is with the crown
and its prerogatives, not with the head that wears it, and we
shall persist before this Committee and elsewhere in drawing
attention to the evils incident to our railway system until these
evils have been eradicated and reformed.

Whether this Committee will do its duty or not ; whether
the Legislature to which it may report will perform its duty or
not ; whether we shall adequately present the evils of ourrail-
2

106

way system or not is at best a matter of but temporary conse-
qneace, because tMs agitation anil desire for reform must con-
tinue and will continue until a remedy is found, because the
pressure is constant upon the community, iind will continue to
be more and more appieciated and felt as other causes, more
readily remediable in their nature, which are hindrances to our
prosperity, are discovered and removed.

We find that in ]850 there were in the State of New York,
with a mileage of 1,230 miles, 26 operated railways; that the
average number of miles controlled by each company was about
45 miles, and now, with almost 0,000 miles of railroad, the
number of roads has increased to but 50, and half this mile-
age and half these companies are now controlled by the
Erie, the Delaware & Hudson and the New York Central
Railroad.

Split up as the interest then was, without a coherent plan
of operatiim, without a systematic method of conduct of af-
fairs, there Avas scarcely any danger to be apprehended from our
then railway system ; but amalgamatitm, as it is called in
England — consolidation, as it is termed ht're — is one of the laws
of railway being, and both there and here, not only in Eng-
land, but also on the Continent, railway consolidation and
amalgamation has proceeded with gigantic strides, as the fol-
lowing facts will show :

The New York Central alone controls one-fifth of our rail-
way mileage of the State ; a one-sixth is under the control of
the Erie; and these corporations have under lease and control
in other States a mileage at least double that which they oper-
ate here.

England has gone through the same process of consolidation
during the same time. The London & Northwestern Railroad,
which in 1846 owned 399 miles, had grown in 1870 to a mile-
age of 1,507. The Great Western, which in 1846 had 126
miles, owned in 1876 1,287 miles. The Great Eastern Rail-
road, which had 220 miles in 1847, in 1870 owned 876. The
Northeastern, which had 274 miles in 1847, owned 1,281 in
1870. An altered condition of affairs was brought about l^y
the existence of these vast corporations now controlling thou-
sands of miles instead of hundreds, and with it came also an
altered spirit toward each other. The smaller railways ante-

107

rior to 1850, wherever thej competed, were constantly at war,
and low local rates were the consequence.

The waste and destruction to these large corporations when
war began between them tvere so great that treaties of peace —
aUiances defensive as to themselves and offensive as to the rest
of the community — were entered into under the form of freight
contracts, &c., &c., and which have culminated in a pooling of
earnings, making for the great trunk lines on westbound
freight, and now on eawtbound freight, a common purse under
the management of one of the most astute and capable experts
on railway matters in this country ; and thus, despite the law
of 1869 and anterior laws, bringing about practically a con-
solidation in fact, although not in form.

Hence, competition is now, even in form, abandoned between
the great railway corporations of this country. The jealous
regard that was had by the law to preserve competition by the
provision that roads running on parallel lines shall not be con-
solidated nor leased by one another, was by these working
arrangements or freight arrangements or pooling contracts,
made nugatory : — a condition of competition no longer exists be-
tween parallel lines, and a close alliance has been formed be-
tween the trunk lines running parallel through different States
to prevent competition between them.

Another important discovery was made by the railway cor-
porations in regard to the limits to which a war of rates could
safely be carried on against each other, and that limit was that it
must stop short of driving a rival line into insolvency. As I
said on a former occasion, an insolvent road relieved from any
present hope of dividends on stock or interest on bonds, and
no one expecting such return on investment of capital, carries
freight for anything that pays an excess over operating ex-
penses. Therefore, the New York Central enters into a com-
bination with the Baltimore & Ohio and Pennsylvania Eoads
to sustain these lines against its own natural advantages and
those of New York Harbor, so as to prevent its rivals from un-
loading themselves by insolvency from the responsibility of
paying dividends and paying interest on bonds, because the
moment they become insolvent they " run wild ;" and there-
upon these insolvent roads, by reason of such insolvency, be-
come more formidable competitors than they were theretofore,
and crush the solvent road. If, on the one hand, making

108

railways insolvent l?y competition would compel tliem to take
up their rails and drive them out of business, and if, on the
other hand, you could competitively build to distributing
points so many lines that their managers cannot combine on a
rate of tolls, the law of competition would apply in railways as
it does in almost everything else ; but as neither of the results
accomplished by competition in the ordinary avocations takes
place, it is clear that we are dealing with exceptional
phenomena, to the explanation of which, to apply the general
law of competition, is to be guilty oidoctrividrc pigheadedness.
Insolvency not only keeps the road in existence, but so alters
the condition of its op(»riiting, that for the time being it makes
it practically eqnivalent to a road that cost nothing to build,
being then run simply for the operating expenses. Therefore,
bankrupting a rival road by competition is ]ilacing it in a posi-
tion of more formidable :md really irresistible rivalry.

Here let me observe, that we are quite willing to concede
that the railway system has couferred enormous benefits upon
society, and that we iu the State of New York have shared
those benefits with the rest of the world ; but, in onr gratitude
to the railway system, for the benefits that it has conferred,
we must not overlook the faults of the men who manage our
present railways, and wlio, as we claim, prevent us from reap-
ing as large a benefit therefrom as we are entitled to.

The men who are at the head of our railway system have
gone into it as they would into any other business, in which,
with greater or snuiller capital, they expect to reap a benefit
and advantage for themselves, and their mode of management
certainly shows that philanthropic motives did not iu the least
enter into the computation in making their investments, but
tliat, on the contrary, tlu'y entered into the business with the
determination of making as much money out of it as they
could, whatever the consequences maybe upon the commanity
at Luge, and they defend that attitude upon the ground that
it is a ])rivate business, which they have a. right to manage
in their own way and for their own special interest and
behoof.

Therefore, whatever our disposition may be to praise those
great engineering and philosophical minds who have invented
for us the steam engine and the application thereof to loco-
motive purposes, we must not confound Vauderbilt with Watt,

109

or Jay Gould with Steplienson, because at the time the men
who uow derive their splendid incomes from railways, entered
into them, these enterprises had long before proved assured
successes, and the business of transportation by rail was no
longer of a problematical or doubtful character.

Let me now draw your attention to the evils which our rail-
way system have brought upon us as a coucommitaut of the
good that they have conferred. See for one moment how splen-
did was tho growth of New York City after the completion of
the canal.

The canals were opened early in 1820. The population of
the City of New York was then about 123,000. In 1830 it
rose to -02,000, an increise of about 78 per cent. In 1840 it
rose to 313,000, an increase of about CO per cent. In 1850 it
rose to 51.3, Ono, an increase of about 70 per cent. In 1860 it
rose to 813,000, an increase of about 60 per cent.

In 1860 the consolidation of the railways may be said to
have been about completed. Through lines were then estab-
lished, and from 1860 to 1870 the rate of increase fell from
about 60 per cent, to about 1 1 per cent., the population in 1870
reaching, according to the United States census, to 912,000.

Let us now look at Philadelphia statistics. From 1850 to
1860, the population rose from 408,000 to 565,000, an increase
of 38 per cent. From 1860 to 1870, the population rose from
565,000 to 670,000, an increase of 18 per cent.

Baltimore statistics show that from 1850 to 1860, the popu-
lation rose from 210,000 to 266,000, an increase of 26 per cent.
From 1860 to 18 "0, the population rose from 266,000 to 330,000.
an increase of 24 per cent.

Boston statistics show that from 1860 to 1860, the popula-
tion rose from 144,000 to 192,000, an increase of 33J per cent. ;
from 1860 to 1870, the population rose from 192,000 to 270,000,
ao increase of 40 per cent.

110

COMPARATIVE RECEIPTS OF GRAIN AT FIVE POETS — NEW YORK7
PHII^ADELPHIA, BALTIMORE, BOSTON AND MONTREAL, FROM
1870 TO 1878.

Total Total Total Total

receipts receipts receipts receipts

five ports. New York. Philadelphia. Baltimore.

ISIO 124,461,841 69,924,176 15,307,011 13,819,101

1871 158,805,433 89,543,673 20,102,425 17,S89,443

1872 166,429,663 90,930,336 24,117,150 20,671,499

1873 174,525,321 92,137,971 24,949,157 19,099,517

1874 192,452,353 107,273,158 24,625,591 24,936,208

1875.^ 179,875,321 93,895,082 28,196,330 22,048,569

187fi.' 212,013,864 95,949,252 35,546,845 36,310,276

1877 205,420,366 103,313,782 25,727,260 34,590,303

1878 293,676,061 162,862,170 45,474,650 47,076,240

THE PERCENTAGE OF THESE RECEIPTS ARE AS FOLLOWS :

1870

1871

1872

1873

1874

1876

1876. _ ,

1877

1878 62.06

New York.

Philadelphia.

Baltimore.

All but N.

56.7

12.3

11.9

44.3

67.0

12.9

10.2

43.0

53.4

14.2

12.2

46.6

52.8

14.3

11.2

47.2

55.8

12,8

12.9

44.2

52.3

15.7

12.2

47.7

45.8

16.8

17.7

54.2

60.3

12,5

16.8

49.6

15.49

16.04

47.94

Then look at the following table of hotel statistics prepared
by the Commercial Advertiser last year from data furnished by
one of the leading hotels :

Year. Daily average.

1866 560

1866 600

1867 550

1868 500

1869 460

1870 450

1871 430

1872 420

1873 390

1874 380

1875 300

1876 276 -

1877 260

Yearly aggregate.

206,000
220,000
200,000
187,600
168.000
165,000
166,000
162,000
143,000
139,000
109,000
100,000
94,000

Ill

I firmly believe that before we shall have concluded the
evidence we shall show to you that this diversion of trade
from New York, this growth of rival cities, is mainly due to
the peculiarities of management of our railway lines, which
in many instances give through rates from and to Liverpool
from Western centres at rates almost as low as the ocean
freights alone would be from New York to Liverpool, or
Liverpool to New York.

Now, gentlemen, first and foremost, we charge and slifiU
l)rove to you that our railway companies have shamelessly
evaded the provisions as to ten per cent, dividends in the
watering of their stock and in the issuing of their bonds, so
that the declaration of dividends gives us now no clue as to
what is actually earned upon actual cost of the roads. In-
deed, they have capitalized the future prosperity of the com-
munity, capitalized the supposed value of their franchises,
capitalized the non-interference of the Legislature and the
neglect of duty on the part of the State, so as to make it
almost impossible to tell what the cost of railway enterprises
has been and how much from time to time of the anaount
which has gone upon the books into the construction account
of these various organizations ■ has actually been invested m
the road.

The best and most careful minds among railway experts
admit the truth of the charge, confess its hardship on the
community, but say "What can we do? If you restrict the
New York roads from carrying at 18 cents a hundred from
Chicago to New York because they charge 22 cents from Can-
andaigua — unless they reduce the Canandaigua rate to below
18 cents the Pennsylvania Central and the Baltimore & Ohio
will do all the through business." My ansv?er is, that if left
to unrestricted competition, the corporations that derive
their franchises from the bounty of our State can continue a
profitable existence only on the condition that the State that
gave them birth shall submit to be strangled by them, the
sooner the State re-asserts her control the better. If New
York sets the example in prohibiting her railways from making
these discriminations against the prosperity of her own citi-
zens, it will not be long before the fanners of Pennsylvania
and of Maryland will, despite the gieat power of the railways
within their borders to affect legislation, insist upon the pas-

112

sage of a like law against the Pennsylvania Eailroad and the
Baltimore & Ohio Eailroad, and all these trunk lines will then
be placed by the laws of their States upon an equal basis,
diminishing their power for miscljief to the States that have
given them birth and nurtured their infancy, without loss— nay,
with profit to the trunk lines themselves.

We shall show that the reports to the State Eailway Engi-
neer and Surveyor, required to be made by law, are utterly
inadequate for any puipose, and so meagre in details as to be
qaite unreliable, and the absence of balance sheets makes
them substantially untruthful. We shall show that the system
of railways accounts is delusive in the extreme, and is a system
Ijy which both the public and the stockholders are grossly
and egregiously misled.

We shall show that the railway accounts, as published
annually by them to the stockholders, do not tell the whole
story, and that no reliance can be j)laced upon the Engineer's
reports.

The inadequacy of the law in this particular was seen by
Mr. Seymour, who, as State Engineer, in his first report under
the law in 1850, says :

" The reports of many corporations under the law, are
" imperfect, needlessly so, I imagine; but the law is so framed
" as to fail in getting at the information desired or aimed at.

" I suppose the main object of the law to be to show the
" actual cost of performing the transportation service of all
" our roads each year, and the amount of that service; reports
" furnishing such information correctly would be of inestimable
" value. * * * * * \Ye should know all the different
" commodities carried, and the rates charged . per ton per
" mile, and the, cost per ton j5er mile ; we should, in fact, arrive
" at the actual, experience of roads in this State as to cost of
" transportation on railroads.

" Tne public have a vast mterest in the question of the cost
" of managing railroads, and of transporting persons and
" passengers thereon.

" We could in this State by such laws as may be enacted,
" settle this question very accurately in the course of a few
" years, under such a variety of conditions as to the amount
" of business, grades, &c., as to furnish a parallel to almost
" any project which might be contemplated in this State or

113

'J elsewhere. * * ^ * * The ' amount paid out' for fuel/
" for instance, or any other item of expense may be very much
" less or more than the value consumed during the year.

The amount paid nut' during a number of years, say eight
" or ten, would be nearly, an accurate representation of the
" cost of the service for that period.

" For these reasons I advise the passage of another law in
" place of the one under which the reports herewith are made
" and in accordance with the foregoing suggestions." The
railways had, however, become too powerful for the State, and
such a law was never passed.

We shall show that these common carriers deal unequally
with localities in this State, and individuals in the same locali-
ties making by special contracts and special rates unjust and
oppressive distinctions, preferring one man to another, in a
particular town, one locality to another, and all this quite in-
dependent of the commercial considerations of wholesale and
retail, and independent of the considerations of mileage, in-
dependent of the consideration of volume of traffic or facility
of handling at termini.

We shall show that gross inequalities arise from this condi-
tion of affairs, and that individuals and communities are put
at the mercy of these great corporations, who have it in their
power to make one man rich and keep others poor, and that
they actually do exercise that power in an arbitrary manner,
without rule, without consistency, and seemingly without reason,
from which flows bankruptcy to individuals and stagnation and
distress to some of the most important centres of trade in our
State.

We shall show that,'as a whole, the interior of this State is
discriminated against in favor of citizens of far Western States
at most distant points, and that such discrimination results in
the decay, if not destruction, of our agricultural interests.

We shall show that wherever the monopoly power exists
without check and points not touched by any competitive
railways are to be found, the tariff rate is grossly unjust and
oppressive, and that even at such points special rates are made
of an arbitrary character, preferring one man in the same com-
munity to others, exempting one man from the general tyranny,
and adding the burden of his exemption upon the already too
heavily laden backs of his neighbors.
3

114

We shall show that many of these rates are made on con-
tracts, by which the shipper agrees not to use the canal, thus
making a discrimination by special contract against the very
piopertj' of the State, for the protection of which in all the
earlier railway charters the provision was inserted that these
self same corporations shall not carry freight which might be
carried upon the canal, or if they do so carrj', that they shall
pay a toll to the State equivalent to what the canal would
have earned by such carriage.

We shall show that some of these discriminations are based
entirely upon personal favoritism and not upon any principle,
and that that whole system of special contracts is a wholesale
"protective" organization by which trade is diverted from one
point to another ; towns and cities are built up and others
pulled down, many private citizens driven into bankruptcy and
ruin, and a general displacement and shifting of well-being of
one to another is brought about, which, if it were done by the
Government itself, and not under the guise of freight charges,
would be recognized as a most outrageous act of tyranny and
violation of every correct principle underlying our form of gov-
ernment.

We shall show that not only are discriminations made be-
tween localities and individuals, but as to whole classes of
freight. Not the least onerous among the exactions of these
railroad corporation is the tax that they impose upon the con-
sumption of milk in the City of New York.

Milk being a commodity which must be rapidly transported,
gives to the railway companies naturally a monopoly of its
transportation. Coming from withm a radius of a hundred
miles from New York, it is a commodity as to which each cor-
poration has a monopoly upon its particular line. They there-
fore combinedly charge a rate of toll so ridiculously in excess
of their ordinary schedule rates that it amounts to a consid-
erable proportion of the value of the article — indeed, one-half
of what the farmer himself receives for his product ; charging
for this class at the rate of 55 cents a hundred, as against a
tariff of less than 11 per hundred cents for first class of other
commodities.

Milk yields a revenue $110 per car per trip, or the astound-
ing revenue of $2,200 per night on each of the local milk •
trains, being a cent a quart.

115

We shall show some glaring instances of dealings with their
own trust on the part of railway managers, by reason of which
the expense of the administration of the railway practically
for all time has been largely increased, and which additional
expense is in its turn a constant tax upon the commerce of
New York.

We shall show that the stockholders have not fared much
better than the pubhc at the hands of the railway director,
and that his interests have been sacrificed in many ways for
the aggrandizement and pecuniary advantage of the men who
control and manage the affairs of the corporations.

Gentlemen, standing as we do at the threshhold of this in-
quiry, and apprehensive, as you probably are, that the sketch
that I have here made of its magnitude and extent may lay
out work enough for you to perform for a year or more, and
thatiu the short breathing spell between one legislative session
and another you scarcely can be expected to take the testi-
mony and make a report, suggests to rae the propriety of
drawing your attention to the fact that we are not alone in
having a railway problem on our hands. England in times
past has had the minds of her statesmen occupied by this
subject, and from time to time, as these evils were manifested
there, her government dealt with and removed them separately,
so that during the very thirty years that we have stood idly
by and allowed these evils to grow to their present magnitude,
England has, by a series of inquiries made by parliamentary com-
mittees and royal commissions — the work of which I have here
before you in these ponderous blue books — mastered the de-
tails of these evils and brought these corporations to book,
and now, through the instrumentality of a railway commission,
holds those gigantic corporations most admirably and power-
fully in check, regulates their tariff and requires that they
shall be published uniformly at all stations, that goods cannot
be hauled for longer distances at prices lower than for shorter
distances, and that no unjust discrimination shall exist either
as to towns or individuals.

Mr. Sterne then explained the series of English reports
from 1840 to lb72, read the names of commissioners, &c., and
read a letter from Mr. Price, showing the additional powers to
be conferred upon the Eailway Commission this year, and
also read from the provisions of Lord Cardwell's Act of 1854.

116

This Committee will, therefore, see that these questions
■which are before them, crowded together, have from 1840 to
1875— a period ^f thirty-five years— occupied, from time to
time, the attention of the English people, were dealt with
singly and disposed of in the best interest of the people.

I do not draw your attention to the condition of the railway
problems of other countries for the reason that in no other
country except England, her colonies, and in the United States,
has the railway system been regarded as anything else but an
adjunct of the tstate works. In all other countries the railway
was placed under the strictest possible State supervision, and
if allowed to be operated by private corporations, provision
was made that sooner or later the State should become the
proprietor of the railway, tiud at all times the government
fixed for tlie railway its tariff of charges and subjected its
management to a most constant and rigid scrutiny and con-
trol. France, iu somethii:g like fifty years, will obtain a prop-
erty almost as large in amount as her national debt as the in-
heritor of the railway system of that country. Belgium owns
two-thii ds of the railways within her borders. Prussia is rap-
idly absorbing the few existing private lines. Italy, in
part, owns the railways within her borders, and controls those
that she does not own. South Germany owns in great part
her railways, and has those which it does not own under ab-
solute control, and regulates the tariff of every pound of freight
that they carry.

Indeed, nowhere, as I have said, except in England and in
this country, hrive railways been considered in any other light
than as public highways, for the proper management of which
in all its details the State was and held itself responsible to its
citizens and subjects.

In this country, the State of New York, with a railway
capital vastly in excess of that which exists in any other State
of the Union is, however, wofully behind them all in deab'ng
with this subject.

By constitutional amendments Pennsylvania has changed
the form of the railway report now to be made, and has limi-
ited the powers of her railway corporations.

Massachusetts has, since 1810, an admirable Commission, of
which Charles Francis Adams, Jr., is at the head, and through
the instrumentality of which the discriminations against local-

117

ities within that State and as to individuals in the same
locidity, have been made well nigh impossible. A complete
system of railway returns, showing a balance sheet, has been
secured by that Commission, and of late years a system of
railway accounting has been prescribed which will secure not
only uniformity in the system of accounts, but some little
guarantee that railway accounts shall tell the truth to the
general public and the stockholders, as well as afford informa-
tion to the directors who know the kabala and mystery of their
peculiar systems oF bookkeeping. These reports I herewith
submit, and shall refer to from time to time.

Illinois has organized a Eaiiway and Warehouse Commission
which, although it is operated under the most disadvantageous
circumstances of constant changes in its fcrsonnel, has done
good work.

Michigan, Wisconsin, Iowa, and Ohio, have preceded New
York in the work of b'inging the railway corporations to some
degree of responsibilit}^ to the State which grants these valu-
able franchises to those who operate them.

Yermont and Connecticut have followed in the wake, and a
NatioDal Congress of State Railway Commissioners is about to
meet at Saratoga for the purpose of securing some uniformity
as to tha legisUition which has governed these bodies, repre-
senting at least fifteen States of this Union, and to our shame
be it said, this State has no right to be represented in tiiat
Congress.

Within the past few years the arrogant pretence made by the
railway companies, that theirs was a private business with which
the public has no concern, and that it was no more a proper
domain of legislation to regulate freight charges than shoe-
making charges has been disposed of by a series of learned
decisions rendered by the Supreme Court of the United States.
That tribunal has now judicially, in this country, formulated
the doctrine as old as Sir Matthew Hale, that when a citizen
puts his money or his property in the rendering of a public
service in the exercise of which he makes use of the sovereign
arm of eminent domain, he gives to the public a copartnership
therein, which renders the use of that property at all times
subject to public control.

Another contention made by the railway companies against
the interference ,by the State witli their peculiar management
is, that the National Government can alone deal with so large

118

a question by reason of the peculiarities of inter-State com-
merce. This is a suggestion whieb, if actocl upon, practically
adjourns any control sine. div.

There is no probability that within any time about which we
need to give ourselves any concern, the National Government
will be effectually empowered to regulate the railways in such
a manner as the States now cau do. The exercise of this
power would involve a considerable change in governmental
structure, by a constitutional amendment of a very far reach-
ing character.

The difficulty of the case that I am commissioned to present
to you is its many-sidedness and the vastness of the wrongs
that have crept into railway managnient, so that to present it
in compassable shape it will be necessary for us to shut our
eyes to many evils that call aloud for remedy.

I shall ask your attention, first and foremost, to the
questions of local and individual discriminations, and to
discriminations ngainst our own State, which have reduced
and are daily reducing the value of our farms to a price on a
par with the new lands of the far Western States, and which,
while to-day it stagnates the population and progress of the
interior of New York, must, perforce, to-morrow, cause whole-
sale emigration therefrom.

Whatever else you may do, I feel quite confident that we
shall not differ as to the expediency of checking the course of
our railways in this matter, and of finding a remedy for an
oppression of so grievous a character upon the people of our
own State by corporations of its own creation.

We shall show you that the law is wholly inadequate for the
proper protection of our citizens as it stands at present ; that
the information vouchsafed to the State Engineer and Surveyor
is totally misleading, and that he>foresooth is helpless to pre-
vent his ofBce from being the instrument of misinformation to
the public, because he is required to publish whatever is
shovelled into his basket.

And if, through the instrumentality of this Committee, a
remedy may be found from the dire oppression which now
rests upon the people of our State from these transportation
corporations, its appointment will form an important epoch in
the political history of our State, and its members will have
earned the lasting gratitude, not only of the present genera-
tion, but to even a greater degree that of posterity.

119

Sarmid Goodman, being diily sworn, testifies as follows :

By Mr. Sterne :

Q. With what railway are you connected? A. New York
Central & Hudson River Railroad.

Q. Any connection with the Harlem ? A. No, sir ; I have
not.

Q. Since when have you been connected with that road ?
A. About twent}' years.

Q. Then you were connected with the road before the amal-
gamation with the New York Central took place? A. Yes,
sir ; I was connected with the New York Central Road.

Q. What are your duties in connection with the road ? A.
I am Assistant General Freight Agent.

Q. What are the duties of the General Freight Agent ? A.
To take charge of the general freight business of the road.

Q. Have you brought with you copies of the freight sched-
ules of the New York Central Railroad ? A. I have a copy of
our printed freight tariffs — local tariffs.

Q. Do you mean the local tariffs that are now in operation?
A. Yes, sir.

Q. Since when have they been in operation ? A. Somie of
them two weeks, some of them two years, some of them six
months.

Q. Has a general change been made within two weeks ? A.
No general change — no, sir; a revised tariff from New York to
the stations on our line has been made — a corrected tariff.

Q. That has been made within two weeks? A. No; we
have been at it two months — three months.

Q. It has been recently made ? A. Within four months.

Q. When did it go into operation ? A. About two weeks
since ; it took some months to print it.

Q. It went into operation two weeks ago ? A. Yes, sir.

Q. Was there any public notice given of its going into oper-
ation ? A. Not particularly ; any one who inquired was told
that in a short time a new tariff would be issued.

Q. kSo that you cannot determine the exact day that it actu-
ally went into operation ? A. I cannot.

Q. Was any order sent simultaneously to all your freight
depots of the new tariff? A. Yes, sir.

Q. Have you brought with you thelocal freight tariffs that

]20

were in operation before this one ? A. I believe not ; no ; I
have not got them.

Q. You have not the old freight tariff? A. Not the old
tariff.

Q. You could get it during the recess, couldn't youj to-day?
A. It would take me three or four hours to get it.

Q. Couldn't you get it within an hour? A. I shall want to
get some lunch during the recess ; I will send for it.

Q. Do those tariffs comprise all points reached by your rail-
way, or to which you name rates within the State ? A. Yes,
sir ; from New York.

Q. Have you the local rates between other points within the
State of freight not reaching New York ? A. Yes, sir ; I have
a tariff here from Albany, Troy, Schenectady and Cohoes.

Q. Have you along the whole line of the New York Central
and Hudson River Eailroad ? A. No, sir ; I have none in
print.

Q. There is none at any of these local stations, either, is
there ; or can you obtain them ? A. No, sir ; I cannot obtain
them.

Q. Who fixes the freight rate ? A. I do by the direction of
the General Manager and General Freight Agent.

Q. Who is the General Manager and Freight Agent ? A. Mr.
J. H. Rutter is the General TraflBc Manager, and Mr. E. Clark,
Jr., is General Freight Agent.

Q. Have you now printed freight tariffs from all points and
to all points reached by your railroad ? A. No, sir ; I have a
tariff from New York for all stations on the Hudson River
Road; 1 have a tariff from Albany and oue from Buffalo;
those are the principal points.

Q. Then there is no printed rate of charge between, say,
Utica and Syracuse ? A. No, sir.

Q. Or Syracuse and Rochester ? A. No, sir ; there is not.

Q. Have you rates between those respective points? A.
We make them as the occasion requires it ; the business is of
such a nature that we cannot make a tariff'.

Q. Then you don't undertake to make any tariff of charges
between those several points ? A. Yes, sir ; we make a tariff
from time to time — a special tariff.

Q. A special tariff for each case ? A. Not for each case, for
many cases.

121

Q, As the circumstances arise? A. Yes, sir.

Q. How long is that special tariff in force ? A. It soiile-
times remains in force a year, and sometimes six months.

Q. Sometimes a few days ? A. Sometimes three days.

Q. Upon whose volition does the remaining in force of
these tariffs depend ? A. They are changed as the business
of the road requires it.

Q. You don't answer my question ; I asked who changed
them ; I did not ask the reasons ? A. I change them by the
permission of the General Freight Agent and General Manager.

Q. Now, is it not the fact that you really make the change
iu each particular case, naming the rate, and that your change
is simply subject to a veto on the part of the General Freight
Agent and Manager ? A. That is true to a certain extent.

Q. Then you have a discretion ? A. I have to a great
extent.

Q. It is left with you ? A. Not altogether, because I have
got to obtain permission from the General Freight Agent.

Q, As a matter of fact do you ask permission in every com-
mon case from the General Freight Agent ? A. I do in almost
all cases.

Q. Before you make the change ? A. Yes, sir ; I suggest
the propriety of making it, when he is present ; when he is
absent I have to do it myself.

Q. How often is he present as compared with his absence ?
A. He is there a great deal.

Q. That is not very definite ? A. He is there most of the
time.

Q. Isn't his' time mainly occupied with the fixing of the
through rates and general management ? A. To a great extent ;
yes, sir.

Q. And the local traffic of the New York Central and Hud-
son Eiver Railr'>ad, is to a considerable extent in your own
hands ? A. Yes ; to a certain extent.

Q. Do you make a difference in the local traffic, as between
summer and winter rates ? A. Do you mean from places
between Utica and Syracuse, and such points.

Q. Yes ? A. We do, but not as a rule ; they are exceptions.

Q. How often do such exceptions arise ; do they swallow up
the rule ? A. It depends upon circumstances altogether.

Q. What kind of circumstances ? A- If a gentleman comes

1±2

with a lot of stoue to go to Syraouse, and stoue is worth in
Syracuse §12 a car, I can't charge him Sl'i to carry it there ;
I havo got t-o carry it for less if necessai'v.

Q. Therefore the rate of taritl" that you fix is dependent
u|'on what the goods sell for — what they will bear? A. To a
certain extent.

Q. It depends also upon the question of whether there is
another railroad between those points willing to carry it for
a little lower rate ? A. That question is considered at times.

Q. How often is that question considered? A. Tery seldom.

Q. Then the question of the competition of another railway
does not enter into your computation at all? A. Not partic-
ularly as to the local business, the business that you refer to
now ; we have no competition between Utica and Syracuse;
we hiive none between Syracuse and Auburn ; yes, we Ijave, but
slight.

Q. Havn't you a competition as between those points with
the canal ? A. There is no canal at Auburn.

Q. Then, to those points where you have no competition,
you have no fixed published schedule rates ? A. No, sir.

Q. And you have no rates as between towns on such points?
A. We have a manuscript tariff.

Q. How long would it take you to fetch us that ? A. I have
not got it at all ; I furnished the sheets to our agents ; each
agent has the sheet.

Q. Then have you no means of knowing what that tariff"
is ? A. I remember it pretty well.

Q. Ho'w long is that manuscript tariff in operation ? A. It
has been in existence ten or eleven years.

Q. Is it not fifteen years without change ? A. No, sir ; it
has been changed several times since.

Q. How often in fifteen years ? A. Four or five times
anjway ; not the entire tariff", but there have been changes
made.

Q. You mean there have been modifications? A. Yes, sir.

Q. But substantially, is not the tariff of fifteen years ago, as
to these local points, the tariff" now ? A. It is the tariff, but is
not used to a great extent.

Q. Why do you call it the tariff? A. If a man wants to
ship a box of goods from Utica to Syracuse, we can tell him

123

what tho prioo is— tou cents, aot'oriliug to tho tavilV; ho can
pay that.

Q. If ho wants to ship inoro than a box? A. If lio ^vants
to ship tivo oar Kiads. and tbo saU> dopontls on tho prioo
ohari<;ed, rto will mako hiiu a tarvtt".

Q. So, that whot.hov von I'hooso to fix a tariff or not
doponds, again, npon your volition? A. To a oertaiu ox-
tent.

Q. To what oxtont ; when you say to a cortain ostont, do
moan suhjoot to tlio rogulations of tho road ? A. The regula-
tions of tho road and the consent Gonoral Freight Agent.

Q. 8ubjoot to your superioi-s. A. Yes, sir.

Q. And, leaving that out of oonsideration, it is neoording to
yourdis.notion ? A. Yos, sir.

Q. When you say that you have those printed rates with
yon— those are tho printed rates from Now York to Btiffalo.
■V. \ OS, sir.

Q, From l>ntValo to New York? A. Y'os, sir.

Q. From Albany to Buffalo? Q. Yos, sir.

Q. From Buffalo to Albany ? A. Yes, sir.

<.j>. And that is all, isn't it ? A. I'es, sir.

Q. IMd yon bring with you the rates of tariff, or schedule of
freight oh.nrgos to points not on your raihvaj-, but to whioli you
mako ratis ? A. I don't make rates to any point, except on
our road.

Q. I'o;- instance, a point on the Rome and 'V\'atortowu Eail-
road? A. I liave nothing to do with it ; they make their own
tariff from Kome.

Q. Don't you uamo a rate to a Now Y'ork merchant who
chooses to ship to Borne? A. I can only name it afW obtain-
ing the tiguros fivm the Kome and "\Vatertown Eoad.

Q. Then tliore is no arrangement between the Rome and
Wateitown Eailroad and yours by which you can uamo a rate?
A. None whatever.

Q. So that in each particular instauco a special rate is
named? A. Yos, sir.

Q. There is no tariff" of charges of connecting roads with
youi-s, tlien ? A. No, sir.

Q. Have yinr copies of special contracts, or the special con-
tracts tliat you l\avo made, and which are in force, which you
have made within one year last past ? A. I have no contracts.

124

Q. Tou have made no contracts ? A. No, sir.

Q. Within the year ? A. No, sir.

Q. Have you a book or books which contain records of such
special contracts ? A. I have not made any ; I don't keep any
record.

Q. Have you any book or books which contain rebates or
drawbacks from schedule rates ? A. I have never made a
drawback or a rebate in my life, at any time, under any cir-
cumstance.

Q. You have not any such book, you say ? A. No, sir-

Q. Have you the circulars that you have issued in relation
to freights during the last two years? A. I have no circulars.

Q. Didn't you issue some ? A. Yes ; but none relating to
freight charges or freight tarifi's ; I have issued circulars at
times for the government of agents.

Q. I am asking simply for what you do personally ; you
have issued no circulars, as I understand you, to others than
your own agents ? A. No, sir, I have not ; none that I can re-
call now ; I am quite sure that I have not.

Q. Did you issue any circulars to your agents to be issued
by them to other people ? A. I cannot recall any, sir.

(Becess from 2 to 3 p. M.)

Q. Have you now the printed schedule rates which were in
force between Buffalo and New York, and Albany and Buffalo,
to and fro, anterior to the ones which are now in force ? A.
Yes, sir, I have.

The witness produces two sheets, being the tariff now in
force, each of which is marked for identification by the
Chairman, " N. Y. C, Exhibit A."

Also two sheets, being the tariff in force anterior to
those now in force, each of which is marked " N. Y. C., Ex-
hibit B."

Q. What are those other papers that you have there ? A.
Tariff on the Hudson River Division, between New York and
Albany.

Q. Have those tariffs been modified within the past 2 or 3
months ? A. They were modified on the opening of naviga-'
tion about the 15th of March, or the 1st of April.

125

Q. The yellow and blue papers whicli you now have in your
hand are the tariff of charges upon the Hudson Eiver Division of
the New York Central and Hudson Eiver Railroad ? A. Yea,
sir.

Q. Now in operation? A. Now in operation ; yes, sir.

The two papers last referred to are each marked '■ N. Y. C,
Exhibit C."

Q. The nest papers that you have brought under my sub-
poena ? A. The tariff between New York and Albany in force
during the winter.

The witness produces a tariff sheet which is marked " N. Y.
C, Exhibit D."

Q. "What are the others? just give them to us consecutively,
and tell us what they are ? A. Tariff on live stock between
Buffalo and Albany.

The witness produces a tariff sheet which is marked " N. Y.
C, Exhibit E."

Q. Is that the same rate between New York and Buffalo ?
A. No, sir ; it is from Buffalo east ; there is no live stock
sbif)ped from here west.

Q. You have not any rate for live stock from here west? A.
No, sir ; here is a tariff on live stock between Albany and New
York.

"Witness produces a tariff sheet which is marked " N. Y. C,
Exhibit F."

Q. Now that is equally true as to that tariff; you have no
tariff of rates from New York to Albany ? A. No, sir, not on
live stock ; then here is the general tariff from places on the
Hudson River Division to all places west of Albany.

Witness produces a tariff sheet which is marked '' N. Y. C,
]ilxhihit G."

Q. These several tariffs that you have now given us — are
those the tariffs now in operation ? A. Now in operation, yes,
sir ; here is the tariff from Buffalo to all stations east:

126

Witness produces a paper which is marked "N. T. C, Exhib-
it H."

The Witness — These are tariffs from all stations on the New
York Central road to New York and to Albany.

Witness produces three papers ; each of which is marked,
" N. Y. C, Exhibit I."

Q. That is east ? A. East-bound, yes, sir ; you have all the
west-bound.

Q. These others that you have, are they duplicates of these ?
A. Many of them are ; some of them are not in use at the
present time.

Q. Those that are not in use at the present time ; let ns
have those, and let us know when they were in use ? A.
There is one that was in force during the winter.

Witness produces a paper marked, "N. Y. C, Exhibit J."

Mr. Sternk — We don't propose to offer these in evidence at
the present moment, but we simply want them marked for
identification, so that we can refer to them for convenience,
and have them in the hands of the chairman. We don't want
to encumber the record with this great mass of figures, a great
part of which will have no relevancy to the question in hand
at all.

Q. The others that you have are duplicates, are they ? A.
They are not in use now.

Q. Those are the ones that I called for, are they not? A.
Some of them you have there now.

Q. I know, but I want all those that were in use until re-
cently? A. Up to within six months?

Q. Yes; I think my subpoena covers everything within a
year? A. Here is one from all places on the line of the New
York Central road to New York during the winter.

Witness produces a paper, marked, " N. Y. C, Exhibit K."

There is one from New York to all stations.

Witness produces a paper which is marked, " N. Y. C, Ex-
hibit L."

There is a tariff on lumber and timber, 1879.

127

Witness produces a paper which is marked, " N. Y. C, Ex-
hibit M."

Here is a tariff in force during the wioter from all stations
east to Albany, Troy, Schenectady and Cohoes.

Witness produces a paper which is marked, " N. Y. C, Ex-
hibit N."

There is the lumber and live stock tariff, east and west
from all stations on the Hudson River Division to New York —
to and from New York.

Witness produces a paper which is marked " N. Y. C, Ex-
hibit O." Tariff from New York to all stations now in force.

Witness produces a paper, which is marked "N. Y. C, Ex-
hibit P." Tariff from all stations between New York and
Albany on the Hudson River road and all stations on the New
York Central.

Witness produces a paper which is marked "N. Y. C, Ex-
hibit Q."

Q. That is now in force ? A. In force preceding the one
that I had a little while ago.

Q. Therefore that is not now in force ? A. No, sir.

Q. That was the winter arrangement? A. That was the
winter arrangement.

Q. These several freight tariffs which you have produced,
and which you claim were in force immediately prior to the
new freight tariffs, which are now in force, how long were they
severally in force ? A. Some of them were adopted on the
opening of navigation, about the I5th of March or the first of
April.

Q. No ; you evidently misunderstand my question ; how long
were the winter tariffs, which you have produced, in force ?
A. From the 1st of December to the 15th of March or 1st of
April.

Q. Are they uniform for every winter ? A. No, sir ; they
are changed from winter to winter.

Q. Then each year you have from New York to Buffalo, and
from Buffalo to New York ; and from Albany to Buffalo and

128

from Buffalo to Albany, a different tariff of charges ? A. We
have a new tariff; sometimes they are the same as they were
the year before, with some modifications.

Q. Will you explain to the committee now what modifica-
tions, if any, are made year after year in those local winter
tariffs ? A. Sometimes the rates are reduced.

Q. Upon what does the reduction or the increase of rates
depend ? A. They depend to a great extent upon the con-
dition of the business of the country.

Q. Now, will you explain to us a little more in detail, what
you mean by that ? A. If potatoes are worth a dollar a bar-
rel we can charge twenty cents from Buffalo to N. Y. per bar-
rel ; if they are worth only fifty cents a barrel, perhaps we
could not charge but ten cents a hundred.

Q. You have given us an illustration as to one particular
commodity ; do you want the committee to understand that is
the principle upon which the reduction or the increase of the
tariff as to the local points named in the exhibits that have
been marked, to wit : from Buffalo to ' New York, from New
York to Buffalo, from Albany to Buffalo and from Buffalo to
Albany, and from New York to Albany and from Albany to
New York — that that is the principle upon which your increase
or decrease depends ? A. To a certain extent ; it also de-
pends upon the through rates from Chicago to New York ; if
it is $1.50 a hundred to New York, then we might charge
seventy-five cents from Buffalo to New York.

Q. You might ? A. We would probably.

Q. Probably, you say ? A. Yes, sir.

Q. Is that the principle upon which you go ? A. We are
governed by it to a great extent ; yes.

Q. To what extent are you governed by it ? A. We make
the tariff from Buffalo as near like the one from Chicago as
we can ; that is, in proportion to the distance.

Q. Do you make the tariff from Utica as near like that from
Chicago as you can ? A. Yes, sir.

Q. Do you mean us to understand that whenever the through
rates change from Chicago to New York your schedule rates
change ? A. They do on certain things ; on grain, if you
please — that is, I mean the general tariff; if the tariff from
Chicago to New York was fifty cents, it would be from Buffalo
to New York twenty-five cents.

129

Q. Oa grain ? A. Yes, sir.

Q. Would you make any change except on grain ? A. On
floni- also ; produce generally.

Q. You say you would ; do you, as a matter of fact, when-
ever the through rate changes, make a corresponding change
for the local rate ? A. Not always ; no, sir ; we could not do

it because

Q. I didn't ask you the reason ; you do not do it ? A. No,
sir.

Q. When you publish this tariff, therefore, you publish it
with an understandina: that that tariff is to be incr-eased or
reduced, depending upon the through rates — is that it ? A.
To a great extent ; yes, sir.

Q. When you answer me, " to a great extent," I don't know
what you mean ; do you or do you not publish this tariff with
an understanding with your customers that that tariff of
charges is not to be considered as the tariff of charges upon
your road except upon the coodition that the through rates
remain the same ? A. No, sir.

Q. Do your local rates change with the changes of the
through rates ? A. Not always.

Q. Tell us upon what principle they do change, and upon
what principle they do not change ? A. We generally make
two tariffs a year, one in the fall and one in the spring of the
year ; the rate on flour and grain is changed perhaps twelve
times a year, or eight times ; I cannot tell you positively.

Q. How does that change appear to the public ? A. They
appear to be very much satisfied ; always have been.

Q. How do you give notice ; your piiblic is satisfied — yim
mean by that, don't you, the people who employ you ; how do
you give notice to the public of those changes of tariff eight or
twelve times a year ? A. We do not notify them at all ; vve
notify our agents at the different stations, and they notify the
customers.

Q. You don't notify your customers ? A. No, sir.
Q. You don't notify the public ? A. No, sir.
Q. You notify only your agents ? A. Yes, sir, our agents ;
send them the tariff.

Q. Then the winter tariff which you have produced here was
not the winter tariff during the whole of the winter of 1878 ?
I think it was, sir ; 1878 and 1879.
5

130

Q. There was no change during that winter ? A. I don't
think there was.

Q. Did not through rates change during that winter, east-
ward and westward V A. I don't think the tariff did.

Q. Did or did not tlirough rates change during the winter of
1878-79 ? A. The tariff rate from Chicago to New York dur-
ing the winter, I believe, remained in force during the entire
winter ; there may have been special rates of which I have no
knowledge.

Q. You do know special rates are given ? A. I am not posi-
tive ; I have nothing to do with it.

Q. Mr. Eutter does that ? A.. I don't know.

Q. Who has charge of the special rate business through rate
from Chicago ? A. It is done in the west.

Q. Who has charge of the special rate business from New
York to the west? A. Mr. E. Clark, Jr., the General Freight
Agent.

Q. When did you, according to your best recollection, make
the last cliauge not indicated in any tariff or schedule rate
corresponding with the change on eastward or westward
bound freight as to through rates ? A. We have made a tariff
from Buffalo and Eochester within a month.

Q. You are now answering me as to the printed schedule
that you have here presented of the tariff? A. Yes, sir.

Q. I am now speaking of a change that don't appear in the
printed schedules at all, but a change, as you say, made from
eight to twelve times a year on great staples like flour and
grain ; when did you last make such a change which don't ap-
pear upon any printed schedule ; A. I think within three
weeks.

Q. Therefore a change has been made which don't appear
upon the tariff in force now ? A. Yes, sir.

Q. Therefore the tariff in force now, as you call it, is not
true as to the rates from Buffalo to New York upon certain
things? A. I believe those certain things are not specified on
the tariff.

Q. They are not specified T A. I think not.

Q. When I asked you to present us a schedule of the rates,
didn't you understand me to mean a schedule of all the freight
that is carried upon your mad ? A. Yes, sir ; all the printed
tariffs we had.

131

Q. Then there is a rate for certain commodities which do
not appear upon your printed schedules that you have here
produced at all ? A. Yes, sir.

Q. Do you want this committee to understand, and me to
understand, that there are commodities that have no schedule
rates ? A. No, sir ; I don't wish to.

Q . Then where is the schedule rate to be found which will
show the rates as to those commodities ? A. It is not printed ;
it is in manuscript.

Q. Is it upon any book ? A. No, sir.

Q. Where is it; in your head? A. No, sir; it is in a tarifif;
we can furnish it, if yoa wish it, in a manuscript tariff, a writ-
ten tariff.

Q. It has been prepared within two weeks ? A. Yes, sir ;
special points.

Q. Will you produce for this committee that manuscript
tariff? A. I will when they desire it.

Q. They do desii-e it through me? A. I have not got it
here ; I will have to go and get it.

Q. Well, you will have time ; what are, according to your best
recollection, the commodities, and from what points are they
which do not enter into any printed tariffs at all ? A. Flour,
gi'ain.

Q. What else ? A. Potatoes.

Q. What else ? A. Other cereals.

Q. Wiiat else ? A. That is all I can remember now.

Q. On what principle, or upoa what rule is it that you make
no printed schedule rates for those products ? A. It is because
the tariff changes so often.

Q. What tariff' chauges so ofteu ? A. The printed tariff ;
the tariff for fourth class fi-eight — flour and grain — changes
very many times, while the tariff on third class does not
change so often.

Q From Buffalo to Albany j-ou make no rates on those
cereals at all? A. I beg to say we do ; yes, sir.

Q. I mean you make no printed, regular rates? A. We
print them in the fall of the year; when we make the general
tariff, we print also a tariff from Buffalo to all stations east.

Q. Didn't I understand you to say the winter rates you
produce here, in printed schedule form, did not contain those

1^2

items ? A. With one exception ; the tariff from Buffalo does
contain it.

Q. Ton don't adhere to that tariff, if the through rate
changes ? A. Not always.

Q. If the through rate changes, when do you adhere to
it ? A. We make a new tariff ?

Q. You don't seem to understand my question ; I asked you
whether you adhere to that printed tariff upon that particular
commodity, and you say no, not always? A. We do until the
tariff changes from the west.

Q. Do you always change as to those poiats and upon those
articles, with the tariff from the west ? A. As near as we can ;
yes, sir.

Q. Can't you give me a direct answer ; what do you mean
by ' as near as we can?' A. We make a tariff in the fall of
the year, or Ist of January, from Chicago to New York, of
sixty cents a barrel ; then we make a tariff from Buffalo to
New York of thirty-five or forty cents a barrel, as near like
it as we can, but occasionally special rates are made.

Q. When a new tariff is made, then you say you do make
a change ? A. As near as we can ; yes, sir.

Q. On that particular commodity ? A. Yes, sir.

Q. From llochester to New York, do you upon grain and
upon potatoes and upon flour, change with the changes of
through rates ? A. Generally we do ; yes, sir.

Q. Then the printed schedule that you have presented here
is not necessarily in force, either for the winter or for the sum-
mer ; it is in force as I said before, merely so long as the
througij rate is a certain rate, is that it? A. Yes, sir.

Q. Now, are you willing- to swear that you have changed from
Syracuse, from Utica, from Rochester, from Canandaigua, your
rates corresponding to the change in the through rates from
time 1o time, or eight, or ten, or twelve times a year, as you
have testified, as to the other points? A. I think I have
"changed them ; yes, sir ; not the through rates altogether, be-
cause we cannot do it.

Q. You have changed then on flour, on potatoes, and on
grain, your tariff from these interior points, eight or twelve
times a year, is that it ? A. I thick about eight times a year ;
yes, sir.

Q. To New York ? A. Yes, sir.

133

Q. What record have you of those changes ? A. I think 1
have a manuscript copy in my office.

Q. Showing those changes in the last two years ? A. I am
not positive about it, but I think I have some of them ; I know
I have a copy-

Q. Don't you enter those changes in the books ? A. Not
always, because they become useless after the tariff changes
again.

Q. Then you keep no record of any schedule rate from any
of those points for any period of. time? A. I kept a record of
them as long as they remained in force.

Q. How would you know, for instance, if any reclamations
were made, or any litigation involving the rates of freight from
point to point, or from any of these interior points to New
York — how would you know what the rate was at a particular
time ? A. Our agent at the station has the tarifl; I believe we
have a copy of it ; but I am not positive about it.

Q. Is there no place where you keep copies of these tariffs
from time to time? A. Yes, sir; but they get lost sometimes.

Q. Those tariffs are under your charge ? A. Yes, sir.

Q. In the office of the New York Central and Hudson Eiver
Kailroad Company ? A. Yes, sir.

Q. These important papers sometimes get lost? A. We may
have some in our letter books — copy books ; I suppose they
might be found.

Q. Then there is not any set of books in which you enter
the freight rates from New Yorlc to those points, and from
those points to New York at all ? A. No, sir.

Q. You keep those on loose sheets of paper ? A. Yes, sir.

Q. And they are liable to be lost ? A. They seldom get lost,
but they will sometimes.

Q. Now, will you produce those that you can find, that are
not lost, covering the last two years ? A. Yes, sir ; when do
you wish them ?

Q. To-morrow we shall be together ; now as to the other
classes of freight; all the numerous items 'mentioned in those
freight schedules ; do they change with the changes in Western
rates also ? A. No, sir.

Q. Now, when you speak of those changes that are made, are
those the changes that are made on your schedule and appear
on the schedule ; in other words, the loose sheets on which

134

yon fix those rates ; is that a manuscript copy practically of
the names of these places, and covering the four classes ? A.
It only covers one class.

Q. Does it cover the whole of that one class ? A. Gener-
ally.

Q. I cannot accept that sort of an answer ; doe.<! it or does it
not cover the whole of that one class ? A. It covers the grain
and potatoes principally, and the cereals geiierall}'.

Q. Then whatever else is in the 4th class it is not covered by
those manuscript changes at .all? A. No, sir.

Q. Therefore it does not cover the whole of the 4th class at
any time ; is that so ? A. No, sir.

Q. Do you have discriminating distinctions between the 4th
class rates ; I mean by that do you subdivide the 4th class at
all? A. No, sir ; excepting grain and cereals.

Q. Is that a subdivision whicli covers anything else but
grain and cereals ? A. Nothing that I am aware of at this
time.

Q. Do you charge, for instance, the same rate per hundred
on potatoes that you do on flour ? A. Not always, sir.

Q. Then you do not? A. We do sometimes charge one halt
the rate on potatoes we do on flour per bai-rel ; that is, if the
rate on flour is twentj'-five cents a barrel from Rochester to
New York, we sometimes charge twelve and one-half cents on
potatoes, and at other times fifteen cents.

Q. Then on what does the distinction depend, between when
you do and when you do not charge the same rates of freight
upon potatoes and upon flour ? A. As a rule, we charge one-half
the rate on potatoes and other fourth class that we do onflom'.

Q. They are both fourth class, are they not ? A. Yes, sir.

Q. Then, as between two different articles in fourth class, yon
do make discriminations between the one and the other ? A. We
make a distinction, not a discrimination.

Q. You do make a distinction between one and the other ?
A. Yes, sir, at times.

Q. Upon what does that distinction depend ? A. At times it
depends upon the condition of the market in the City of New
York and elsewhere.

Q. That is again upon the principle of charging as much as
it will bear, is it not ? A. Sometimes it won't bear much, and
then we won't charge much.

135

Q. Now, what else does it depend upon ; this distinction
between two articles in the same class of freight ? A. Upon
the quantity produced.

Q. The whole quantity produced all over the country ? A.
Yes, sir.

Q. What else ? A. Upon the quantity of freight offered for
transportation.

Q. What else ? A. That is all I can remember just now.

By Mr. Husted :

Q. I don't think you have answered the question, and I don't
think you understand it ; Mr. Sterne wants to know why you
charge twenty-five cents a barrel on flour, and twelve and one-
half cents on potatoes ? A. We don't charge twelve and one-
half cents a barrel on potatoes at any time.

Q. Suppose you charged fifteen cents on potatoes and twen-
ty-five cents on flour, why don't you charge twenty-five cents
on potatoes as well as flour ? A. Flour is worth $8 and pota-
toes only $3 a barrel.

By Mr. Sterne :

Q. Then the difference is the value of the commodity ; is that
it? To a great extent; j-es, sir.

Q. You always answer me, " to a great extent," or " to some
degree ;" now, Mr. Husted has drawn out the fact that the
reason is, or one of the reasons, because potatoes are worth
$3 and flour is worth $8 a barrel ; now, do you base your s ib-
divisions or distincti(ms of fourth class freight upon the value
of that fourth class freight? A. To some extent, but not
altogether.

Q. What principle governs you in determining that question
— you are the man that fixes the rates, are you not? A. I do
not.

Q. What determines you to fix it? A. The quantity offered
for transportation to begin with.

Q. You mean the quantity of potatoes and flour? A. Yes,
sir.

Q. What difference does it make to your railway whether
vour freight cars are laden with potatoes or flour ? A It does
not make any, but sometimes we have not got one-half the cars
required for either.

136

Q. But then it cannot be dependent, can it upon the quan-
tity that is offered ; because it does not make any difference to
you whetlier you carry flour or potatoes, except you had rather
haye the flour, because it pays a higher rate ? A. It does not
pay a higher rate ; not generally.

Q I want tojsnow why and when you make discriminations
betweenBuffalo and New York, on flour or fouith ohiss freights,
between flour and potatoes, and why you do it ; on what prin-
ciple you do it ? A. If the rate on flour from Chicago to New
York is sixty cents a barrel, they can pay twenty-five cents a
barrel from Buffalo to New York, can't they ?

t^. I don't know whether they can or not — I am asking you?
A. Ir, would be about a fair rate.

Q. It might be ? A. That is the reason why we make it ;
potatoes are not shipped from Chicago to any extent ; they are
all raised in this State ; there is no competition in tliem, and
they are all raised in this State and shipped from this State —
niue-tenths of them that are used here.

Q. What result follows from that data that you have just
mentioned ; what is the consequence of that— that you charge
more for potatoes than you do for flour '? A. Not neces-sarily ;
but less for flour sometimes than for potatoes.

Q. Mr. Husted has just drawn out from you the fact that the
reason you charge more for flour than for potatoes is because
flour is $8 a barrel and potatoes but $3 ; now, therefore, that
principle does not seem to govern you in fixing the rats as be-
tween flour and potatoes ? A. I wish to say to you that the millers
in this State compete with those of the West, and the rate is
governed by rates from the West to a great extent ; potatoes
are not shipped from the West, and therefore there is no com-
petition whatever ; it is simply the price that regulates the
freight charges. *

Q. What have you to do with the competition of millers
between each other ? A. If we charged a dollar a barrel for
flour from Rochester to New York, the miller could not shijj
any flour.

Q. Is that the reason? I want to know why yon charge less
for potatoes than for flour? A. We don't charge less at no
time.

Q. At no time? A. No, sir ; not as a rule.

Q. Tell us, then, when the rule varies, because we want to

137

know something about the rules that govern your action in
determining these freight cliarges? A. If you please, our rate
from Buffalo to New York is twenty cents a hundred upon
potatoes; the rate on flour is forty cents a barrel.

Q. That is about 200 pounds? A. Yes, sir ; that is the
rate we are governed by.

Q. That is the same, isn't it ? A. Yes, sir.

Q. And does that remain the same ? A. Most generally it
does ; yes, sir.

Q. When does it vary and on what principle does it vary;
you have not answered me that question ; what principle
governs your conduct in determining the rates of freight in
making the variations as between these two subdivisions of the
fourth class freight ? A. We sometimes rednce the rate on
flour, when it is not necessary to reduce the rate on potatoes,
as I have stated before.

Q. Then you refuse to reduce it on potatoes, because you
have no competition in them, and you do reduce it on flour
because you have, is that it? A. We do sometimes reduce the
rate on flour simply to help the millers, that is all ; that is the
reason.

Q. Then sometimes you help the millers by reducing their
freight on flour ? A. Yes, sir ; we do whenever we can.

Q. How does that help the millers ? A. It enables them to
compete with the western millers.

Q. What determines you as to the times and as to the
points when you see fit to reduce their rates so as to enable
them to compete ? A. As far as we can when there is a
new tariff published from the west, we make our rates from
Buffalo afterward to correspond with those from the west.

Q. Do you from Canandaigua ? A. Generally, yes, sir.

Q. How often do you or don't you? A. I don't know, sir,
as there are any mills in Canandaigua; I know of mills in
Kochester and Buffalo and Black Eock, but I am not aware of
there being any in Canandaigua.

Q. Do you from Little Falls to New York ? A. Yes, sir ;
we make a general tariff ; if there is a mill at Little Falls we
change our rate.

Q. Then you want us to understand, do you, that when you
change your rate from Buffalo you change your rates from

138

other poiuts at the same time ; is that true ? A. Generally ;
yes, sir.

Q. When isn't it true ; when don't you ; how often do
you change your rates from Biififalo without eliauging jonx
rates from kieal points in the interior of the State of New
York on these articles I have named, cereals and flour? A.
I don't think we do at any other time ; when we make a tariff
from Buffalo we always make it from Little Falls.

Q. The same corresponding change ? A. Yes, sir.

Q. Where have v"ou a record of the changes in these several
tariffs which are not put in print and not formiilated in any
shape except on your books ? A. I think I have copies in my
office.

Q. You will please produce them ? A. Yery well.

Q. You say they are not in a book at all, but are on loose
sheets ? A. Yes, sir ; loose sheets.

Q. Do you mean to say when each change that is thus made
an order issues from your office to all the stations along
the line of the road, making the chauire along the line of the
road ? A. When there is a general taiiil made ; yes, sir.

Q. Now, we are talking of two dift'erent things ; when j'ou
S])e;ik of the general tariff do you mean these tariffs (referring
to papers in his hand) '? A. Yes, sir ; or a tariff' on flour ; a
special tariff on flour or a special tariff' on grain.

Q. In each instance, then, that you make a special tariff on
a particular article varying from this tariff, an order issues
from your department to all the other agents along the line of
your road, by which they are advised as to the change ? A.
To all agents that are interested in the change.

Q. Tell us, please, what agents are not interested in that
change ? A. xit the station where there is no mill they are not
notified.

Q. Then your charge is determined by the question, whether
or not, there is a miller at the particular point ? A. Or if any
freight is shipped from that particular point.

Q. Haye you any limitation as to the amount that must be
shipped from that particular point, before the fi-eight change
operates as to that ? A. No, sir.

Q. When there is such a change eastward, is there any corres-
ponding change westward ; for instance, to illustrate what I
mean ; if the rate of flour — of shipping a barrel of flour from

139

Chicago to New York — goes down, you claim that you make a
change generally, as you say, from Buffalo and interior points
to New York for a barrel of flour ? A. Yes, sir.

Q. Do you also make a corresponding change westward for
like distances? A. There is no flour shipped west.

Q. 1 did not ask you that ; do you make any corresponding
change westward? A. No, sir.

Q. Therefore, the question that determines your freight
charge upon a particular article, is not the amount of distance
you carry it, or what it costs you to carry, but the condition
of the market, as you say, what will it bear, the kind of goods
it is, and what the rate is from some distant point to New
York ? A. No, sir ; not at all ; you are mistaken ; the first
condition is the cost of transportation ; there are modifications.
Q. Will you tell me, please, what difference there is in the
cost of transportation of a barrel of flonr from a barrel of pota-
toes ? A. I cannot tell you ; I have not figured it up ; I don't
know.

Q. Is there any that you know of ? A. I am not aware of
any.

Q. And yet you change the freight on the one and you don't
on the other ; therefore, it is not true that the first condition
of any freight charge is the cost of transportation ? A. We
sometimes carry flour at a loss, just to help those millers on
that line of the road, sir.

Q. I don't ask you that ; if it is true, that under certain cir-
cumstances, that you don't vary your freight charge upon a
barrel of potatoes, and that you do vary your freight charge
upon a barrel of flour, and if it is also true that it does not cost
the company anything more nor less to carry a barrel of pota-
toes than a barrel of flour, then the condition upon which
you base your freight chai'ges is not the cost of transporta-
tion ? A. As a rule, we are governed by the cost of transpor-
tation.

Q. You don't answer my question ; as between these two
articles, you are evidently not governed by the cost of trans-
portation ? A. Allow me to say to you that as a general rule
we make the rate on potatoes about one-half price per hun-
dred that we do on a barrel of flour.

Q. But yet it costs you the same to carry a barrel of pota-
toes as a barrel of flour'' A. That is the same raie ; if the

140

rate on flour is forty cents a barrel, and the rate on potatoes
twenty cents a hundred, it makes the price the same.

Q. But you do vary, you say, the rate on a barrel of flour,
and you don't upon a barrel of potatoes ; and you have testi-
fied to this committee that the reason vs^hy you vary the
rate on the barrel of flbur, and do not on the barrel of pota-
toes is because the potatoes are produced in New York, and
there are no competition rates from the West as to potatoes ;
but that as to flour, there are competition rates, and you vary
accordingly ; now, the variation that you make in your tarifl' is
not dependent upon the cost of transportation, the cost of
transportation on flour and potatoes being the same ? A. Not
altogether ; no, sir.

By Mr. Husted :

Q. How much does a barrel of potatoes weigh? A. 180
pounds.

Q. How much a barrel of flour ? A. 210 pounds.

.By Mr. Sterne :

Q. Now, you have testified that you don't name any rates
on points reached by roads connected with your railway, and
not belonging to the New York Central Eailway system ? A.
No, sir.

Q. Do you mean to have us understand that if a shipper
from New York proposes to ship upon a point on the Eome
and Watertown Railway, say to Richland, that you have not
any rates for him ? A. No, sir.

Q. Suppose he wants to pay the freight in advance, what do
you do ? A. Telegraph and ascertain what the rates are.

Q. Then you name him a local rate to Eome? A. Yes, sir.

Q. Then you charge the local rate to Eome, and the local
rate of that railway to the other point ? A. We don't charge
the local rate ; tliey charge it themselves, from Eome to Rich-
land.

Q. You certify your local rate, and have it collected at the
end of the trip ? A. Yes, sir.

Q. Do you name rates to Ogdensburgh ? A. Yes, sir ; by
agreement with the Eome and Watertown road, who furnish
us with their figures.

Ill

Q. Then there are points even on the Kome and Watertown
Railway where you do name rates? A. There are three
points ; I don't name the rates ; I obtain them from the
General Freight Agent of the Kome and Watertown Ilailway.

Q. Don't you name them ? A. Yes ; by his permission.

Q. I don't care how ? A. I don't make the tariff at all.

Q. You make the tariff up to the point where you touch the
Eome and Watertown Eoad, don't you '? A. Yes, sir.

Q. Very well ; then you make three fourths of the tariff,
don't you ? A. No, sir ; about two thirds.

Q. And the other one-third is made by special arrangement
between the Eome and Watertown Railway and yourself ? A.
Yes, sir.

Q. How long does that arrrangement subsist, and what
duration has such an arrangement as that ? A. It can be
changed at the option of the Geneal Freight Agent of the
Eome and Watertown Eoad.

Q. If I were to ship a large quantity of goods and ask you
for a rate to Ogdensburgh you would name it without tele-
graphing to the Freight Agent of the Eome and Watertown
Eoad ? A. I have a tariff in my office to that particular point
— OgdeDsburgh, Potsdam and Potsdam Junction.

Q In what book are your special rates entered? A. We
have a great number of books — eight or ten books.

Q. In which your special rates are entered ? A. Yes, sir.

Q. Now, these special rates are to all points on your road,
are they ? A. There are to different points ; yes, sir.

Q. What points are there on your road to which special
rates are made ; I am speaking now locally ? A. You mean
from New York ?

Q. From New York ? A. Sometimes make special rates to
Albany.

Q. What other points ? A. Sometimes to Utica.

Q. How aiten to Utica ? A. I cannot tell you how often ;
when application is made.

Q. What other points ? A. Syracuse.

Q. What other points ? A. Lockport.

Q. Little Falls? A. Little Falls.

Q. Canandaigua ? A. Canandaigua ? Sometimes.

Q. Schenectady ? A. Yes, sir.

Q. Eome ? A. Yes, sir.

142

Q. Oneida? A. Yes, sir.
Q. Auburn ? A. Yes, sir.
Q. Skaneateles ? A. Yes, sir.

Q. Then do you make special rates between here and Al-
bany? A. Yes, sir.

Q. What points ? A. Poughkeepsie.

Q. What others? A. Hudson.

Q. What others? A. These are all lean call td mind now.

By the Chairman :

Q. Are there any points you do not make special rates to ?
A. No, sir, I don't know of any.

By Mr. Sterne :

Q. Where is your schedule of special rates — there isn't any
is there ? A. We haven't any that I can get access to.

Q. There is no schedule of, special rates, is there? A. No,
sir.

Q. Who fixes the special rates ? A. I fix them by consent
of the General Freight Agent and General Manager.

Q. You are the man who fixes them ? A. Generally ; not
always.

Q. And those special rates vary within what limitations from
these published schedule rates to those various points? A. It
depends upon the quantity of freight shipped.

Q. I didn't ask you that ; I want to know within what limi-
tations of figures do those special rates vary from these print-
ed rates that you name on this printed schedule ? A. They
may vary from ten to fifteen cents a hundred.

Q. Don't they vary much more largely than that even ? A.
They may sometimes.

Q. And don't they vary somewhat upon the class to which
they belong ? A. They also do, yes, sir.

Q. Are there not points to which you named special rates in
which all classes are put into one class, and that you have one
class to individuals at the points you have named ? A. There
have been some cases of that kind.

Q. Are there not some cases now ? A. There are some now,
yes, sir.

Q. I see for instance that the rate published for Syracuse is
42, first class ; 35, second class ; 29, third class ; 18, fourth

143

class ; that is the rate to the general public ? A. Yes, sir ; that
has been the rate ; I believe there is a new tariff now.

Q. Spring management of 187'J? A. There is one still later
than that.

Q. But yoii vary these even ? A. There is;a later tariff than
that. ' •

Q. Made within three weeks? A. Yes, sir.

Q. How long was this in operation ? A. About two months
I believe.

Q. I see yoiir rate to Syracuse according to the last number
— number 24 — is that the one ? A. Yes, sir.

Q. Is 37 tirst class, 29 second class, 25 third class, 18 fourth
class ? A. Yes, sir.

Q. Don't you name a special rate to somebody in Syracuse
and give a special rate to somebody in Syracuse for all these
classes as one class ? A. I do to several persons.

2. What is the rate that you thus named — look at me ; Mr.
Depew cannot help you ; you know it ; you have got it all in
your own head ? A. Different prices.

Q. That is no answer ; I want to know the rate ? A. If I
reinember right we carried some freight at ten cents a hundred ;
all classes.

Q. Then there are individuals in Syracuse who get from
you a rate of ten cents a hundred on all classes now? A. Yes,
sir.

Q. How much higher was your general rate in percentage
than this (showing paper) during the past year? A. Than
this last tariff ?

Q. Yes, sir ; 15 to 20 per cent, wasn't it? A. Yes, sir.

Q. Syracuse, as well as to other points ? A. Yes, sir.

Q. Wasn't that price of ten cents a hundred given to those
few individuals in Syracuse then when your tariff rate was even
higher than now ? A. I am not j^ositive about it ; it was either
ten or eleven ; possibly twelve ; I would not want to swear to
it.

Q. Now take the point of Schenectady ; to how many people
did you name special rates in Schenectady ? A. I don't re-
member just now ; there are three or four, perhaps.

Q. Do they get all their classes carried as one class? A. I

think not.

Q. To come back to this Syracuse case ; the rate at which

144

you charged these two porsons iu Syracuse is eight cents a
hundred less for all classes than the lowest class on your
printed schedule rate ? A. Yes, sir.

Q. Now, cannot you give me your best memory as to Avhat
you name as to Schenectady ? A. I believe I named the rate
to some shippers of fifteen cents a hundred.

Q. All classes together ? A. No, sir ; I believe it was twenty
cents for first and second class, and fifteen cents for third and
fourth.

Q. As against the published rate of 25, 21, 18 and 15? A.
Yes, sir.

Q. Schenectady is nearer New York than Syracuse, isn't it?
A. Yes, sir.

Q. How much nearer is it by miles ? A. 130 miles.

Q. And yet you name the rate to Syracuse on an average
of seven cents a hundred less as a special rate to certain indi-
viduals than you do to Schenectady? A. Yes, sir.

Q. Then the rates that you named as special rates to indi-
viduals do not depend upon the distance carried ? A. Not
always.

Q. It don't in this case ? A. No, sir.

Q. How long has the a.rrangement that exists with reference
to special rates as to these two individuals in Syracuse been in
existence ? A. There are more than two, I beg to say ; per-
haps three or four ; it may be six.

Q. Possibly six ? A. Yes, sir.

Q. Do they all get the same rate ? A. I believe so.

Q. Don't you know that they do not ? A. I am not positive
at this time, but I believe about six firms in Syracuse get the
one rate.

Q. Then you have got some other special rate for Syracuse
for other people, haven't you? A. Yes, sir.

Q. What special rate have you in addition to the special
rate of ten cents a hundred to Syracuse to other people ? A.
I have some to smaller shippers.

Q, How many ? A. I could not tell you at this time ; per-
haps ten or fifteen^ perhaps more ; may be twenty.

Q. How much is that special rate as to all classes of freight?
A. It depends upon the kind of property they ship and in
what quantities.

Q. You don't auhwer my question ; I didn't ask you that; I

145

want to know how much it is in cents a hundred it is to these
second class special rate people in Syracuse ? A. Some of
them are, first and second class, twenty-five cents ; third and
fourth class, fifteen cents.

Q. As against 37, 29, 25 and 18 ? A. Yes, sir.

Q. Have you a third class of special rates for Syracuse ? A.
We have a great number of special rates, but I cannot recollect
them all just now.

Q. How many classes of special rates have you got to Syra-
cuse to individual shippers? A. They vary from the nature
of the business.

Q. I didn't ask you that ; I want to know how many classes
of special rates you have to merchants in Syracuse on goods
shipped to them from New York or shipped by them to New
York? A. We may have forty or fifty contracts, perhaps we
may have

Q. I don't know what you may have ; you may have ten
thousand, and you may have one ; how many have you ? A.
Perhaps we may have fifty.

Q. And each one of these varies ? A. Yes, sir.

Q. Except as to the few that you have named, ten cents a
hundred ? A. Yes, sir.

Q. And a few others that you have named — each one varies
as to the rate? A. Yes, sir; according to the nature of their
bxisiness.

Q. What proportion of the shipments you make from New
York to Syracuse, and what proportion of the shipments you
make from Syracuse to New York, are carried at special rates,
and what proportion at these printed schedule rates? A.
Perhaps ninety per cent, of all the business to Syracuse is
carried at special rates.

Q. And ninety per cent. -of all the business I suppose from
Syracuse is carried at special rates ? A. I don't think so ; no,
sir.

Q. How much; what is the percentage? A. Perhaps one
half.

Q. Is not that true of every point touched by your railway,
of any city or town above ten thousand inhabitants in this
Statf! ? A. I think not ; no, sir.

Q. Is that same state of afiairs true of Utica that you have
just now described as to Syracuse ? A. I think so ; yes, sir^
7

146

Q. What lowest rates are there that you named to certain
shippers as special ra\es, as compared with the schedule rates
that you now print? A. At Avhat point?

Q. Utica ? A. I think I have Fome at ten cents a hundred.

Q. To Utica? A. Yes, sir.

Q. "What are your lowest special rates to Utica ? A. About
ten cents.

Q. That is the same as the lowest special rate, isn't it, to
Syracuse? A. Yes, sir.

Q. Syracuse is further away from New York than Utica ?
A. Yes, sir ; slightly.

Q. So the same rate is made to a distance nearer New York
and to a distance farther from New York as to a special rate
— in this case ? A. Yes, sir.

Q. That is, ten cents a hundred for all classes to individual
shippers ? A. Yes, sir ; to some few large shippers.

Q. Two or three, isn't it ? A. Yes, sir.

Q. Now you have got another special rate? A. At Utica?

Q. Haven't you ? A. Yes, sir ; a great m.any.

Q. "Well, I don't want to take up the time of this committee
unnecessarily ; the same condition of affairs is true at Utica as
at Syracuse and other places ? A. Yes, sir,

Q. And about the same proportion of special rates are
given ? A. Yes, sir.

Q. Now, will you give us your special rate to a place named
here on your railway as Frankfort ? A. I don't think we have
any there.

Q. You haven't any ? A. No, sir ; I don't know as there is
anybody there shipping any goods.

Q. Has not Frankfort any storekeepers? A. I think not;
I never heard of any.

Q. And you never ship any goods from Frankfort? A.
I don't know ; there may have been, but I never heard of it.

Q. How is it about llion ; any goods shipped there ? A.
Yes, sir ; a great many.

Q. That is a place you have special rates for ? A. Yes,
sir ; I think so ; I know I have.

Q. How is it fibout the special rates for that place ? A. I
cannot recall the rates just now.

Q. Are they higher or lower than the Syracuse or Utica

147

rates ? A. I believe they are about the same price for one
particular coucern there — one large establishment.

Q. Now, just tell us how long these agreements or under-
standings for speci^il rates continue ? A. I believe they can
all be cancelled at the option of the company.

Q. When you snj you believe A. I am quite certain

of it.

Q. Is there any evidence of that fact in the hands of the
company showing they can cancel them whenever they choose ?
A. I have none ; no, sir.

Q. Do you mean to say that when you made a shipment to
Grouse, in Syracuse, after you have made it, you can charge
him the schedule rates ? A. I believe Mr. Grouse's rate is
made for a certain period.

Q. Then there are special rates named to certain individuals
for certain periods ? A. Yes, sir.

Q. Now, what period are those special rates named for, and
what evidence is there of that special rate ? A. The arrange-
ment is verbal, I believe.

Q. Don't you know it? A. I know it; in this case I know
it.

Q. Are there any special arrangements or rates made by
Mr. Rutter without your knowledge ? A. I think, not ; still,
there may be ; I don't know what he does.

Q. Are not freight bills made out under your direction?
A. No, sii-.

Q. Who has charge of the making out of freight bills— Mr.
Ivutter ? A. They are made out at the different stations ; they
are made out by the agent there ; the freight bills at New
York are made out by the agent at St. John's Park.

Q. How does the agent at Syracuse know what the special
rates are to all these various people at Syracuse ; who informs
him ? A. He gets notice from this office — from my office.

Q. Now, what record have you in your office upon which as
a basis, you know what the special rates are ? A. I have a
book there, a number of books.

Q. I call for those books ; I want to see them ? A. They
are not under my charge, sir.

Q. Who has charge of them ? A. They belong to the com-
pany ; the company has charge of them.

148

Q. Who makes the entries in those books ? A. Different
clerks.

Q. Under whose directions are those clerks ? A. Under my

direction.

•Q. The books are in your office, are they not? A. Not m
my own office ; no, sir.

Q. You don't pay the rent of the office ; it belongs to the
New York Central and Hudson Eiver Railroad Company ? A.
Yes, sir.

Q. They are in the office occupied by you, are they not ?

A. Yes, sir.

Q. Then what did you mean by saying they were not under
your charge? A. They belong to the company and not to
me.

Mr. Depew— I may as well state that I enter an objection
here to the production of contracts as between the road and
specific individuals. We are perfectly willing to admit all the
main facts as Mr. Sterne is drawing them out in relation to
special rates to specific points, special rates on s[)ecial classes
of goods to special places, governed by particular circum-
stances ; but when it comes to what particular individual in
any particular place has this contract, there are two parties to
it; one is the railroad company, and the otheris the individual
or firm.

The Chairman — The contracts themselves ordinardy would
be the only proof of this. I understand your objection to he,
as you have stated it, that it is unnecessary, in order to ac-
complish all that is intended by this investigation, to require
the production of these books ?

The Chairman — In my judgment, the production of the books
in the first instance would be the proper way, as an abstract
proposition. Whether the circumstances are such as to war-
rant a deviation from that rule, and whether the committee
can obtain all they desire otherwise, is a question which I will
submit to the committee. The question is not before the
committee in any shape in which we can decide it now.

Mr. Steene — I call for the books.

The Chairman — The subpoena did not cover the books, did it?

Mr. Stebne — Oh, yes. I asked for a record

Mr. Depew — You asked for all contracts. Now, they are not

149

here. For the purpose of raising the question we dooline to
produce them.

Mr. DuGuiD— I move this matter be referred to execulivo
session of the committee. (Carried.)

Adjourned to Friday, 10 A. m., June 13, 1879.

Friday, June 13, 1879, 10 a. m.

The Committee met pursuant to adjournment, and was called
to order by the Chairman.

Present — All the members of the Committee.

Mr. Sterne submitted the following documentary evidence ;

Chapter 253, Laws of 1826, entitled " An Act to incorporate
the Mohawk & Hudson Kiver Railway Company," and par-
ticularly Sections 12 and 17 thereof.

Also, Chapter 294, Laws of 1833, the original act of incor-
poration of the Utica & Schenectady Railroad Compiiuy,
particularly Section 16.

Also, Chapter 228, Laws of 1834, the charter of the Aubuin
& Syracuse Railroad, particularly Sections 11 and 15.

Also, Chapter 349, Laws of 1836, charter of the Auburn
& Rochester Railroad Company, particularly Sections 9 and
17.

Also, Chapter 269, Laws of 1834, charter of the Buffalo &
Niagara Falls Railroad Company, particularly Sections 9 and
16.

Also Chapter 260, Laws of 1836, chartei' of the Niagara
Falls & Lewiston Railroad Company, particularly Sections 12
and 17.

Also Chapter 427, Laws of 1836, charter of the Troy &
Schenectadj' Railroad Company.

Also Chapter 292, Laws of 1836, charter of the Syracuse &
Utica Railroad Company, particularly Section 6.

Also Chapter 242, Laws of 1886, charter of the Attica &
Buffalo Railroad Company, particularly Sections 9 and 11.

Also Chapter 241, Laws of 1832, charter of the Tonawanda
& Buffalo Railroad Company, particularly Sections 28 and 29.

150

Also Chapter 177, Laws of 1834, charter of the Lockport &
J^iagara Falls Kailroad Company, particularly Sections 19 and
25.

Also Chapter 427, Laws of 1837, charter of the Eochester &
Lockport Railroad Company.

These several charters are the original charters of the rail-
roads which in 1853 were consolidated and amalgamated as
the New York Central Railroad.

Also Laws of 1828, page 17, charter of the Ithaca &
Owego Railroad Company, Sections 9 and 11.

Mr. Stebne also cited the decision of Judge Bradley in the
case of the Lake Superior andMississippi Railroad Company
vs. The United States, 93 U. S., 3 Otto, 446, deciding that a
railroad is a public highway.

Mr. Sterne also submitted the charter of the New York &
Erie Railroad, ch. 224, Laws of 1832.

Also Laws of 1833, page 229.

Also Laws of 1834, page 57G.

Also Laws of 1836, page 227.

Also Laws of ld38, page 208,

Also Laws of 1840, page 117.

Also Laws of 1842, pages 281 and 420.

Mr. Stebne stated that there were several other charters of
the New York & Erie Railroad from 1844 to 1853 which
bear upon the question but rather remotely, and relate to the
tolls which the Erie was paying to the State Treasury arising
from the provision in the charter tliat the)' Shall pay to the
State such tolls as the canal would have earned upon the
amount of freight they were carrying, and also provisions ex-
onerating the Erie from the payment of interest first and after-
wards of principal of the debt that it was owing to the
State.

Mr. Sterne offered in evidence a certificate from the Comp-
troller giving a statement of the aid furnished to the railroad
companies by the State of New Yorii, giving a sum total of
$8,260,591.04, and showing receipts by the State in return of
$756,l./2.73.

Certificate of the Comptroller received in evidence, and
marked "Ex. 1, June 13, '79."

151

Samud Goodmnii s examination lesumed :

By Mr. Sterne :

Q. Have yon brought those loose sheets ? A. All I could
prepare in the short time allowed me (producing papers).

Q. Are these copies ? A. Yes, sir.

Q. How many more are there of which you have brought no
copies ? A. There may be five or six more.

Q. These are variations, are they ? A. Yes, sir.

Q. From the printed schedule rates ? A. Yes, sir.

Q. Tbe originals of these were made out when? A. At the
time stated thereon.

Q. "Who made them out ? A. I made the original figures
myself.

Q. Were they submitted to Mr. Eutter ? A. I believe they
were, sir.

Q. And he approved of them ? A. Yes, sir.

Q. Did he make any changes in them ? A. I don't recol-
lect ; 1 think not.

Q. Now, can you tell me, for instance, how long the sheet of
December the 11th, 1878, was in force ? A. Possibly until
March the 15th ; it would be, as a rule.

Q. Did not I understand you to say you had no rule about
these variations ? A. "We generally make a tariff in the fall
of the year and another one in the spring of the year, but
special tarii3fs are made in the interim.

Q. Didn't I understand you to testify yesterday that these
special rates on flour, feed, grain and potatoes were made as
the rates from the west changed ? A. Yes, sir ; generally

Q. Now, as you could not determine beforehand how those
rates changed, there was not any fixed time for which these
tariffs were made, was there ? A. Not particularly ; but we
take it for granted that a tariff is made in tbe fall of the
year, say 1st of December, and another one in May or April.

Q. Here is one made February 5th, 1878 ; now, how long
was that in operation ; that was made neither in the fall or
spring, but in mid-winter ? A. Perhaps it was in operation
three months.

Q. How long did it remain in operation ? A. I cannot re-
member positively now, but I think you will find a supplemen-
tary tariff there.

152

Q. No ; I find none until August 7tl), 1878 ; was there none
between Februaiy 5th— special tariff or special vaiiatious as to
tlifse articles mentioned hereiu — between February 5th and
August 22d, 1878 ? A. I think there was some time in May.

Q. Why didn't you make a copy of that ? A. Want of time
prevented me doing that this morning.

Q. Ton can furnish the other copies ? A. I think I can ; I
believe I have them.

Q. Will you do so for the Committee ? A. Yes, sir.

Q. I see here a tariff made August '2 Id, 1878 ; that is made
neither in spring or fall, but in midsummer ; how did that
variation take place ? A. It may have happened that the rates
from the West changed ; it may have happened that compe-
tiii-r lines changed it.

Q. Have you no recollection on the subject ? A. I cannot
assert positively ; no, sir.

Q. Have you or not any recollection upon that subject ? A.
I have some ; yes, sir.

Q. Let us have the benefit of that recollection? A. I pre-
sume the tariff was made-

Q. I don't ask your presumptions ; what do you hioiu on the
subject ? A. The tariff must have been made because the
rates from the West changed ; advances on rates.

Q. Have you any recollection on the subject ? A. No ; I
could not swear I have positivel}'.

Q. How long do you think that tariff was in operation ? A,
Perhaps until October 1st.

Q. I find, however, one of September Ith, 1878 ; that is
within three weeks of August 22d, 1878, you have another
tariff. A. Is it on the same class. of property, sir?

Q. Potatoes only? A. What is the previous one ?

Q. The previous one is on floui", feed, grain and potatoes ;
so the rate changed again — not the special tariff rate, but the
special schedule rate — changed again on the 4th of September,
from the rate which it was on the 2''A of August ? A. There
were no potatoes shipped in August, so it was not necessary to
make a tariff.

Q. But you had a tariff on potatoes ? A. A mere nominal
tariff, but nothing shipped under it ; the tariff was intended
for grain which was shipped the year round.

153

Q. But you did make a tariff for potatoes at that time ? A.
Yes, sir.,

Q. What induced you on the 4th of September, 1878, to
make a change in your rate on potatoes ? A. Potatoes were
being shipped then ; there were none shipped in August.

Q. -Hadn't you a tariff running from the year before, from
August, on potatoes? A. Yes. sir.

Q. What induced you to change the August rate on potatoes
in September— ^within tliree weeks after? A. It must have
been made necessarj' by competition.

Q. Don't you remember — tliis is less than six month ago —
what was the occasion of the change made by you on the 4th
of September, 1878, in the tariffs on potatoes ? A. I could not
tell you positively, under oath ; I think I know why.

Q. Let us know why, if you remember — I don't want any
guess or theory ; what induced you then on the 4th of Septem-
ber, 1878, to make a change in the tariff? A. We made the
tariff in order to enable shippers to bring their potatoes to
market.

Q. Then the tariff that you had in August, did not enable
them to bring their potatoes to market? A. Perhaps not, I pre-
sume not.

Q. That is, that tariff was so high that shippers could not
bring their potatoes to market under that tariff — is that it A.
I could not say as to that positively ; the tariff was not in-
tended for potatoes at that time, because none were shipped
until September.

Q. Suppose that ia August, 1878, a shipper at Eome wanted
to ship ten barrels of potatoes to "New York ; what rate would
you give him ? A. The tariff you have there.

Q. Then for all j)otatoes if any were shipped in August, the
August tariff' was the rate ? A. Yes, sir.

Q. Now, why did that rate change ? A. In September they
were shipped in larger quantities.

Q. Do you change your rate by reason of the quantities that
are shipped ? A. Often ; yes, sir.

Q. Is that the rule, that the larger the quantity that is
shipped, the lower your rate or the higher the rate, what is it ?
A. Sometimes lower and sometimes higher.

Q. When is it lower, depending upon the quantity, and when
is it higher depending upon the quantity ? A. In the months
8

154

of August and September, when we want a large quantity of
freight, we make less rates ; when we have a surplus of cars
and can take it.

Q. Are not the months of August and September the months
when there are large through shipments from the West ? A.
Yes, sir; but through shipments are not shipped in the New
York Central cars, but in the through line cars.

Q. So the New York Central cars here not used for through
shipments ? A. Generally used on the line of the road.

Q. Through shipments are made by what are called fast
freight line cars ? A. Yes, sir.

Q. Don't the New York Central contribute a number of cars
to these fast freight lines ? A. Yes, sir ; they do.

Q. Their own cars ? A. Yes, sir.

Q. Then through shipments are made, are they not, in a
very considerable degree in New York Central Eailway cars ?
A. Some of them ; but they have a great number of cars used
especially for the State traffic.

Q. Why is it you want a large amount of shipment of goods
in August and September and don't want it in the winter
months ? A. In the winter months there is generally so much
freight we don't know what to do with it.

Q. Now, will you tell me the reason for that ? A. It is be-
cause the farmers have time to bring their freight all into the
market.

Q. Is. it not because the canalis closed? A. To a certain
extent that is so.

Q. Your summer rates, therefore, are lower than your winter
rates generally ? A. Yes, sir.

Q. What proportion of your cars run empty westward as
compared with the proportion that run empty eastward ? A.
I could not tell you, sir ; I have no information on the subject.

Q. You can tell me, probably, something more general : Do
more cars run emptly eastward than empty westward ? A.
No, sir.

Q. Are they alike as to the emptiness ? A. I think there
are more cars go west empty than east.

Q. Now, the bulk of the trafiac is from the west, east ? A.
Yes, sir.

Q. And your cars run both fuller, and more of them full,
from the west to the east during the whole of the year ; is not

155

that so ? A. I could not say about that, positively ; there are
times of the year wheu we have more west bound freight than
eastward bound.

Q. Isn't that rarely the case ? A. It is not often the case,
but sometimes it is the case.

Q. Isn't it true that from two-thirds to three-fourths of the
amount of freight that is carried upon your road is carried
eastward, and not westward ? A. I think not, sir.

Q. What do think to be the proportion of east bound freight
compared with west bound freight, in bulk and quantity ? A.
I have no positive opinion on the subject, but I should say
five-eighths is east bound.

Q. Then you say the ground on which you reduced your
tariff on that special article, in August, is because there is
more freight — that you want to till your cars at that time ?
A. That must have been the reason— or one of the reasons.

Q. Let us know what the other reason is ? A. It may
have been competition.

Q. Don't tell me it may have been ; it may have been a
great many things, but what was it — what induced you, as the
man that made these figures, to make these changes in your
tariff? A. I don't know whether the tariff is lower or higher ;
I have not looked at it yet.

Q. If the tariff is higher than, it wr„s before, the reason that
you have named, that you wanted to fill your cars, is not the
true reason ? A. This is a special tariff, anyway.

Q. I wish you to answer that, if the rate was higher in Sep-
tember than it was in August, the reason that you have named
— that you wanted to fill your cars — is not the true reason ?
A. It is one of the reasons ; yes, sir.

Q. How do you fill your cars by increasing your rate ? A.
In the month of August no potatoes are shipped at all ; in
September there are.

Q. If the September rate is higher than the August rate, and
the reason for making the September rate higher than the
August rate was as you have stated, to fill your cars, why is —
if it appears, however, that it is lower than the August rate,
then the reason to fill up your cars was not the reason ; do
you understand my question ? A. Yes, sir ; it was the reason ',
if the rate was lower than it was in August, it was to fill the
cars.

i56

Q. If higher, tvhat is the reason ; also to fill your cars ? A.
I don't tnow ; because the property could bear it, I presume,

Q. Then, oue of the reasons that make up your freight sched-
ule is the desire to fill your cars, and another reason that the
propety can bear it ? A. Tes, sir.

Q. And you make it higher or lower dependent upon just
these two reasons ? A. And also upon competition.

Q. But you have not any competition, you told us, from
Utica, foT instance, and no competition upon potatoes at all,
because no potatoes are shipped fi'om the west ? A. There
is competition in this State, also ; not fiom Utica to Syracuse,
I said, but there is from Utica to New York, and there is from
Lockport to New Toik ; canal lines, canal shippers ship
fi'eight.

Q. That brings me to another question — These special
schedule rates and variations from schedule rates as to certain
classes of 4th tlass — special subdivisions of 4th class — don't
apply to places between Albany and Buffalo, or between Al-
bany and New York, do they ; these are. again, throUi^ih rates,
from Buffalo to New York, and from Albanv to New York ?
A. From all stations to New York.

Q. Yes, sir ; but they don't apply to stations between these
thne terminal points'? A. Not as a rule, sir.

Q. What is the exception about that ? A. I wish to say to
you that if you make a rate on" grain, or feed, or flour, if you
please, from Kochester to Albany, the same rate applies to
all stations lietween Albany and Utica, or from Lockport to
Albany.

Q. If you do, but I am confining you now to these rates ;
these are special rates, are they, from Albany to New York,
and from Buffalo to New York ? A. Yes, sir ; from aU points
on the line between Buffalo and Albany to New York.

Q. Now, these rates do not apply ? A. No, sir.

Q. These rates do not apply to Schenectady or Utica or
Syracuse and Utica or Syracuse and Auburn ? A. No, sir ;
they do not.

Q. Now, when yon make these special tarifl" rates what do
you do for the local commerce between those points ? A. We
always make the rates upon special application for them.

Q. That is, each case stands on its own bottom ? A. Its own
merits ; yes, sir.

16^

Q. And you have neither manuscript schedules or printed
schedules showing any rates as between these points ? A. No,
sir.

Q. And you make those rates ? A. Yes, sir ; I stated to you
yesterday that we had a book whicli we apply on local sbip-
ments ; a manuscript book, but it has been so modified and
changed that it would not be operative now.

Q. So that all the local tariffs are all in your own head
practically ? A. They are in books, some of them ; they are
all special rates.

Q. There are no schedule rates as to local tariff at all? A.
Yes, ail- ; we also have special tariffs.

Q. You mean for special individuals ? A. Special cases ;
yes, sir ; no particular individual.

Q. Now, to return to these manuscript variations in flour
and feed, grain and potatoes, don't these vary by special ar-
rangements ? A. Sometimes ; yes, sir.

Four schedules produced and marked "Ex. 2, June 13, '79,"
" Ex. 3, June 13, '79," " Ex. 4, '79 " and " Ex. 5, June 13, '70."

Q. ^o what degree and what extent do these rates severally
set forth in Exhibits 2 to 5 inclusive vary ? A. We sometimes
have an application for special ratea from large shippers ; a
gentleman has a great quantity of freight to ship and he re-
quires in order to enable him to get it to market, a special rate.

Q. Why to enable him to get a large quantity to market
does he re.quire a special rate ? A. There may be only a margin
of one cent a bushel in grain here in the City ; if we charge
him two cents more than he can get in the City, he can't get it
to market.

Q. Wouldn't it be true as to the small shippers, as well as
the large shippers ? A. It might, sometimes.

Q. A small shipper don't get a special, rate and a large
shipper does? A. He sometimes does; a small shipper
also.

Q. When do you give a small shipper a special rate ; in
short, what is your rule as to special rates ? A. We make special
rates whenever it is necessary.

Q. Whenever who thinks it is necessary ; whenever you
think it is necessary, is that it ? A. Yes, sir.

168

Q. Therefore, whenever you" think it necessary you make
special rates ? A. Yes, sir ; when there is a convincing argu-
ment that there should be one.

Q. Now, when do you think it necessary ; what is your rule
about it; does every case stand on its own bottom ? A. We
have manufacturers on the line of our road, a great many who
could not live except upon special rates ; they could not com-
pete with others : we have some of the largest manufacturers
in the country upon the line of the New York Central Koad,
and the same goods are manufactured in the west, and
unless you protect and take care of these manufacturers
they could not live, and thousands of men would be thrown
out of employment.

Q. That arises from the fact that the western man can
get a lower through rate, than you make a general rate for him
from those places ? A. I beg your pardon ; no, sir.

Q. Why could not the manufacturer at Utica live in compe-
tition with the manufacturer at Chicago if your schedule rate
from Utica were, in proportion to the distance, as much lower
as the distance is to New York ? A. Manufacturers in Utica
sell freight in Chicago ; sell a good many goods in Chicago.

A. No ; I g,m now speaking of eastward bound? A. What
I refer to particularly is west bound freight now.

Q. I wanted to know whether or not on these rates of freight
you do or do not make changes, and you said you did? A-
Yes, sir.

Q. Then I put the question to you whether or not you make
special rates to all these, and you said, " Yes, I do ;'" then I
wanted to know on what basis you make your special rates,
and you answered me that it was on your impression as to the
necessity? A. Yes, sir.

Q. Now, I want to know from you what the rule is that you
have in your mind when the necessity arises on east bound
freight for a special rate ? A. The rule is the manufacturers
want to get it into the market to meet competition.

Q. Meet competition with what? A. Western manufac-
turers,if you please.

Q. What is the reason they cannot compete with the western
manufacturer ; isn't it because the western manufacturer gets
a lower rate than they ? A. No, sir ; the manufacturer of iron

159

in the west can buy that iron cheaper in the west than the
manufacturer at Utica can, if you please ; that is one instance.

Q. What is the reason that a manufacturer of cloth at
Utica cannot compete with the manufacturer of cloth in the
west ? A. Because it is made in New Jersey ; there is very
cloth made in the west ; made in New Jersey and over east ;
there is very little cloth manufactured in the west.

Q. Tell the reason that actuates you in making, in any
special case, a special rate for them differing from your
schedule rates on eastward bound freight? A. It is in many
cases to enable the shippers to meet competition.

Q. In other cases which are not covered by these, what is
your reason ? A. I have no other cases ; all special rates are
made upon that principle to meet competition ; to protect
manufacturers on our line and to enable them to keep their
manufactories running.

Q. Do you give special rates to every manufacturer on your
line ? A. I think ever}- one that applies for them ; yes, sir.

Q. Then the condition of getting the special rate is making
the application ? A. Yes, sir.

Q. Do you invariably grant a special rate whenever an ap-
plication is made to you ? A. I believe I do in nine cases out
ten, when we find it proper, and %ve do find it proper in most
cases.

Q. You do when you do, and you don't when you don't ;
that is what that means? A. We do when we find it neces-
sary.

Q. Well, that means that you do when you do, and you
don't when you don't? A. We almost always do on every ap-
plication, when there is a special good reason.

Q. Then why, in the name of sense, have you any schedule
rates at all? A. There are many things shipped for which
a special rate is not necessary.

Q. Who determines the necessity of a special rate ; you do?
A. Yes, sir.

Q. Then why have you a schedule rate at all for the articles
for which you always make a special rate whenever it is asked?
A. Because sometimes they ship in very small quantities.

Q. Now, tell us what the unit of quantity is that determines
you as to the special rate, as compared witli the schedule rate ?
A. A car load, if you please ; or ten car loads.

160

Q. Tell what determines you, who are the freight agent,
in making a special rate on a particular article in which you
say you always make a special rate on application ? A. The
quantity shipped.

Q. How much ? A. Sometimes half a car load, and some-
times five cases only ; but they are continual shipments ; a
gentlemen manufactures the year round and ships it all over
our road ; sometimes he has five cases, and sometimes a car
load ; we carry all his property at a special rate.

Q. Then it is on condition that you alone carry his property,
and nobody else; is that it? A. Yes, sir.

Q. That is one of the reasons ? A. Not the special condi-
tion ; it is one of the conditions.

Q. And therefore he practically agrees, doesn't he — sub-
stantially agrees tliat he won't ship by canal? A. It is so
understood.

Q. And then you give him a special rate ? A. Yes, sir ; in
some cases.

Q. Name how much he ships, and how little ? A. With a
manufacturer it does not matter how much the quantity.

Q. Now tell us what those articles? are on which you gave a
special rate to everybody on application ? A. There are, per-
haps, fifteen manufacturers of cotton cloth in the City of
XJtica.

Q. You do not answer my question-; I asked you to name
the article? A. Cotton cloths.

Q. On all cotton cloths that come from the interior of the
State to New York, you invariably give a special rate on appli-
cation ? A. Yes, sir.

Q. Is that special rate the same to everybody on application,
or does that special rate vary according to the case ? A. It
varies according to the quantity shipped.

Q. Does it vary according to the distance ? A. Yes, sir ;
sometimes.

Q. Does it vary according to the individual ? A. No, sir.

Q. You say it varies according to the quantity ? Yes, sir ;
but not the individual.

Q. What is the quantity that one man gets a special rate at
and another man gets another special rate at ? A.. One man
may ship a hundred car loads a year

Q. I didn't ask '' may ;" what quantity is it that determines

101

you to give one man a special rate and another man a special
rate ? A. One man does ship a hundred car loads a year, and
another man only one car load ; that may make a difference.

Q. Does it make a differeii,ce ? A. It does make a difference-

Q. Now how mucli difference does that make, aud give me the
points where that difference is thus made — where is there a
manufacturer on your line of road that ships a hundred car
loads a year who gets a special rate, and another manufactuier
who ships one car load at that same place who gets another
special rate ? A. There are some at Utica.

Q. Is there at Utica a manufacturer of cotton cloth who
ships by your road a hundred car loads to New York?
A. I think so.

Q. What rate does he get ? A. Am I compelled to answer
the question, Mr. Depew?

Mr. Steene — Tou had better ask the chairman of this com-
mittee.

A. Am I compelled to answer the question, Mr. Chairman ?

The Chairman — Unless the books are produced ; yes, sir.

Mr. Depew— No objection to answering it.

The Witness — Twenty cents.

Q. Is there a manufacturer at Utica who manufactures cot-
ton cloths and who ships but one car load a year and who
gets a special rate ? A. Yes, sir ; nearly so ; I am not positive.

Q. What does he get as a special rate ? A. About twenty-
five cents.

Q. What is the schedule rate ? A. I think thirty-eight and
forty cents.

Q. Have you any rates intermediate between the one car
load and the hundred car loads ? A. No, sir.

Q. You give nobody a special rate on cotton cloths, lor in-
stance, from any point in your 8tate, unless he ships a car-
load ? A. I don't think I do ; I don't think there is a manu-
facturer on our line who does not ship a car load in a year.

Q. Then you carry no goods — no cotton cloths — at schedule
rates at all ? A. I could not say positively as to that because
there is some cotton cloth shipped from the east to the west
and then resold ; those we may charge on a tariff' rate ; there
may be five oases from Springfield, if you please, to Syracuse.

Q. Do you know of any such case ? A. There are cases.

162

but I caunot recollect them just at this time ; but there are
eases every elay.

(}. Do jou speak from knowledge ? A. Tes, sir ; I do.

(}. Tlieu, except such goods as come from out of this State
there are uo shipments made ou the Hue of your road of cotton
goods for manufacturers except at special rates'? A. I think
not.

Q. Xow, you have not answered my question why you make a
schedule rate at all on cotton cloths manufactured in this State
to come to New York City ? A. Because many times people
want to ship cotton cloths and do not requii-e the necessity of
having this special rate.

Q. Then you make your schedule rate on the theory of as
much as it will bear ? A. We make it at a reasonable price.

Q. What you think is reasonable? A. Yes, sir.

Q. And this as you have told us is as much as it will bear ?
A. Not in all cases.

Q. Then cotton cloth is not one of those cases that is upon
the basis of as much as it will bear ? A. No, sir ; none of it
is as much as it can bear ; it is a proportionate rate to what it
will hear.

{}. Have you produced the books I called for yesterday ?
A. I have not ; they are not in my possession.

Q. You stated that yesterday, and you testitied subsequently,
that they were in your possession ; you mean you don't own
the books, and didn't pay for them '? A. I do not own them
and cannot take them away any more than I can anybody
else's propertj'.

Q. You don't think you can under subpoena"? A. No, sir.

Mr. Sterne — I call for the books which contain the entries
or records of special rates made to shippers within the State of
New York to and from New York Oitj.

The Ch.ueman — What period of time ?

Mr. Stehne —Within one year last past ; and copies of all
contracts now in operation.

Mr. Depew— I object to the production of these memoranda
and contracts, first, because it is'irrelevant and immaterial to
the purposes of this inquiry, and, second, because it discloses
the names and business secrets of the customers of the com-
pany when the main fact can be got out which this inquiry is
aimed at, without that disclosure ; third, thi.t we have uo

lea

riglit, without the conseut of the individunl parties to these
contracts, to disclose in this manner the natnre of their busi-
ness with us. And another reason why we object is, that the
discrimination and the rate which the prosecution seeks can
be ascertained from the witness without the contracts being
produced.

The Chaikman — The objection whether it is immaterial we
cannot determine, not having knowledge what the books con-
tain; as to the second objection, the State, unquestionablj',
through its representatives, has the right to call for that in-
formation, and the Committee, in executive session, this morn-
ing determined that inasmuch as in this case, if actually in
court, the books would be necessarily produced as the basis of
evidence to require their production.

Mr. Depew — I make this proposition, Mr. Chairman : that
we will submit a full synopsis of all contracts and agreements,
excluding merely the names of the parties with whom they are
made.

The Chatkman — According to the testimony of the witness
yesterday these books are several in number and ponderous in
size ; whatever is received in evidence by this Committee will,
as a matter of course, be printed, and form a part of the re-
port ; the production of the books for the inspection of the"
Committee and their being received in evidence are two sejjarate
and distinct matters ; the Committee have no interest in know-
ing the names of these people otherwise than as they bear on
the question of discrimination as it is charged that parties are
given special rates for political influence and otherwise, but the
objection that you raise is not well taken, and I think the books
had better be produced for'the inspection of the Committee.

Mr. Depew — Do I understand, by producing the books for
the inspection of the Committee, that it is for the Committee
alone ?

The Chairman— And counsel.

Q. The time contracts do not appear on the books, do they?
A. I have no contracts of the special rates proper on the
books ; we have special rates extending over a certain period.

Q. Does the extension of the time appear upon your books ?
A. I think so ; I couldn't say positive.

Q. Don't you know ? A. I believe they do ; I could not say
positively.

164

Q. Is that the only record of the special rates that there is ?
A. Yes, sir ; these books.

Q. The shipper gets nothing? A. He may sometimes ' get
a letter, you know.

Q. Do you keep copies of those letters ? A. Yes, sir ; we
keep copies of all letters.

Mr. Steene— Now, I call for copies of the letters extending
special rates as being part of the contracts for those special
rates ; I want the letter-books of the past year extending these
special contracts and special rates to shippers in the State of
New York.

Mr. Deppw — We object to the production of our letter-
books.

By the Chairman :

Q. Do I understand that your letter-books are independent
of these books that you described in your testimony yester-
day, as containing memoranda of these special contracts? A.
Yes, sir ; they contain all our private business.

By Mr. Sterne : M

Q. How many letter books are there in your department
containing the letters of the last year — copies of letters of last
year ? A. There may be from seventy-five to one hundred.

Q. In your special department ? A. Yes, sir.

Q. Containing the press copies of the letters of the last year ?
A. Yes, sir.

Q. Are these letters offering these special contracts spread
through all these seventy-five or one hundred books ? A. Yes,
sir ; most assuredly.

Q. How many clerks have you in your department? A.
Eighteen or twenty.

Q. And they all write letters in these ? A. No, sir ; not all
of them ; there is a gentleman here who writes about a hun-
dred letters a day from dictation (pointing to a stenographer).

The Chairman — It seems to me the production of these
original books will give all the Committee require.

Mr. Sterne— You will find from the testimony of the wit-
ness that these letters relate to the time for which the con-
tracts are to run.

16.^

By the Chaieman :

Q. The memoranda in these freight books, I take it, will dis-
close that ? A. Yes, sir.

The Chairman — I think we had better have the other books
first.

By Mr. Sterne :

Q. Are these letters after one formula ? A. Not altogether;
no, sir.

Q. How do they vary? A. The same as you would conduct
your correspondence ; we do not write them all alike.

Q. Wouldn't they vary simply as to the rate, and as to the
name of the person to whom they are addressed, and as to the
'place and the time for which the contract is to run ? A. Yes,
sir ; and in the language used.

Q. Then you have no formula ? A. No, sir.

Q. How many letters do you think, as a whole, there are
upon this subject of special rates? A. I could not say for
certain.

Q. Are there as many letters as there are special rates? A.
No, sir ; because a great many are made verbally.

Q. What proportion ? A. More than one-half are made
verbally.

Q. And the other half are made by letter? A. By letter.

Q. Are the more important ones made by letter or verbally ?
A. Many of the important ones, or most of them, are made
verbally.

Q. You are not giving an answer to my question ? A. I am
as near as I can.

Q. Are the more important special contracts made verbally
or by letter ? A. They are made verbally.

Q. The more important ones are all made verbally? A. Yes,
sir.

Q. Those made by correspondence are the least important ;
is that what you mean to say ? A. Yes, sir.

Q. And when you make time contracts, you always make
them verbally ? A. In most cases ; in many cases we do not
make any contract ; they are simply special tariffs ; I have not
made a written contract.

Q. Don't you consider it a contract when you write a letter,
appending your name as freight agent of the New York Central

Ilailroad, by which you agree to carry freight at a certain
rate ; don't you consider the road bound by that? A. No, sir.
Q. And you would feel yourself free to charge any other
rate? A. There may be cases occur when I would.

By the Chairman :

Q. Whenever a memorandum of special rates is made in
these books alluded to, is there a corresponding letter sent to
the party ? A. Not always ; in very few cases ; not half the
cases.

By Mr. Gkady :

Q. When there is a letter sent to the party, does it •correspond
with the entry in the books ? A. Nearly so ; but there are
many letters which offer rates that are not accepted.

Q. Then they are not entered in the books ? A. No, sir.

By Mr. Bakhr :

Q. Does the substance of these letters appear upon the
books containing the entries of these rates ? A. Whenever
the rates are accepted.

Q. So that all the letters where rates are fixed and agreed
upon appear in substance on these books ? A. Yes, sir.

By Mr. Sterne :

Q. Are there any letters fixing rates accepted, which do not
appear upon your books ? A. I believe not, sir ; the intention
is always, when they are accepted, to appear on the books.

Q. Whether the shipments are made or not? A. If the rates
are accepted, the shipment will be made, as a rule.

Q. Doesn't the first entry upon the books make its appear-
ance when the rate is accepted ? A. No, sir ; when the ship-
ment is made.

Mr. Sterne — Now, Mr. Depew, will you produce the books?

Mr. Depew- -The counsel have not looked at these books.
We want to see if they contain irrelevant matter not called for.
We can make our examination this afternoon, and make our
rejjort in the morning.

The Chairman — ^I think we had better act on the suggestion.

167

By Mr. Sterne :

Q. "What evidence have you in your possession of the agree-
ment to wliich you have testified that shippers make, as a
condition of having special rates under certain circumstances
— that they will ship all by your line ? A. I have none, sir ;
I have to rely upon the honor of those gentlemen.

Q. Is there any understanding with them as so the secrecy
of the rates that have been given ; you have heard Mr. Depew
say that this was a secret between the railway company and
the shipper or the consignee ; is there any tinderstanding as to
the secrecy to be iiept ? A. In many cases it is understood
that the rates are to be kept secret ; that they are confi-
dential.

Q. Confidential from whom ? A. From everybody except
the officers of our company.

Q. Is it understood with the shipper or consignee that the
rates are to be kept secret by him ? A. Not always.

Q. Sometimes ? A. Yes, sir.

Q. What are those cases in which the understanding is with
the shipper or consignee, that the special rate that he receives
shall be considered a secret between you and him ? A. A
man may ship five hundred car loads of freight over the
road

Q. (Interrupting.) Now I do object, once for all, to this form
of answering — what it may be ? A. How can I answer ?

Q. I want to know the actual cases ; when, and under what
circumstances yoir make an arrangement with the shipper, that
the special rate that you give him, shall be a secret between
him and you? A. When a man ships, or agrees to ship, five
hundred car loads over the road, we give him a rate to cover
that shipment — understand me — extending over a period
of time, it is understood that he is to keep the rate to him-
self ; another man, having but twenty car loads gets a rate
a trifle higher, a little higher ; him we do not bind to secrecy
at all.

Q. You bind always, therefore, to secrecy the man that gets
the lowest rate ? A. Not particularly so, but we do in some
cases — not in all cases.

Q. Do you bind to secrecy the man who gets the highest
special rate ? A. No, sir.

Q. Then is it not necessarily that the man you bind to se-

168

crecy is the man who gets the lowest special rate ? A. It may
be so.

Q. Now, isn't it so ; what possible object is there under any
given circumstances to bind to secrecy the man who gets the
highest rate ? A. To avoid aiiuojance to the company.

Q. What annoyance do you avoid to your company by
binding to secrecy the man that gets the highest rate ? A. It
is not the highest, but the lowest ; it is not the highest, I stated
the lowest.

Q. Now, you correct your testimony ? A. It is not the
highest ; it is most any rate.

Q. Whenever you give a special rate, you bind the man to
secrecy ? A. Not always, but in some cases.

Q. When does it happen? A. In tenor fifteen or twenty
cases, or fifty cases out of five hundred.

Q. Then in fifty cases you bind the man who receives the
special rate to secrecy as to the rate he receives? A. There is
nothing binding about it.

Q. You tell him he is to keep it secret ? A. Yes, sir ; I tell
him so, as far as he can.

Q. What are the distinguishiug characteristics in those fifty
cases out of five hundred in which you bind him to secrecy,
wliich distinguish those fifty cases from the four hundred and
fifty cases in which you do not? A. A certain gentleman may
be located at a point where we have active competition with
other railroads ; we give him a rate low enough that his prop-
erty may be shipped over our road ; another man is located at
a point where competition is not so strong, and we may charge
him a few cents more.

Q. When you say you may, you mean you do? A. Some-
times, not always ; I think when the same quantity is shipped
by any gentleman, we charge the same rate always ; we always
make the same rate when it is an equal quantity shipped.

Q. What other circumstances are there in the fifty cases out
of five hundred in which you bind a man to secrecy ? A. That
is about the only reason I can name.

Q. Are there reasons that you cannot name? A. No, sir ;
none that I can remember.

Q. The cases where you bind men to secrecy are therefore
cases where there is active competition in the same town ? A.
Yes, sir.

169

Q. When you fiurl that he has violated that secrecy, what
do yon do with him? A. We cannot do anything with him.

Q. Do you stop his special late? A. If we want his busi-
ness we do not.

Q. Do you or do you not, when you find he is violated that
secrecy, stop his special rate ? A. No, sir.

Q. Never in any instance ? A. Well, not that I can recol-
lect.

Q. Do you recollect any instance of men violating that
secrecy ? A. I do not.

_Q. Then, the reason why you have never abi-ogated a man's
special rate, because he has violated his secret, is because
no such secret has ever been violated ? A. Not at all : I am
not aware of any ; it may have been violated every day in the
week.

Q. If you were aware of it, what would you do ? A. I don't
know as I would do anything about it.

Q. What possible object is there to bind a inan to secrecy
when you don't do anything about it if he violates the
secrecy.'' A. No special object; it is a matter of conve-
nience.

Q. Convenience to whom ? A. To the company.

Q. And to the shipper ? A. Yes, sir.

Q. You have said that you never knew of a case of any vio-
lation of that secrecy ? A. No case has come to my knowl-
edge.

Q. You have never punished anybody by putting back upon
them the schedule of rates in consequence of a violation of
that secrecy ? A. I don't think I have.

Q. Are there any drawbacks or r abates marie in you office?
A. NoQe paid.

Q. Any made that are paid by some other department of
your railway? A. Overcharges all refunded at times.

Q. Overweights also ? A. Overweights also.

Q. Overweights and oveicliarges? A. Yes, sir.

Q. Who determines the overweights and overcharges that are
thus referred to? A. Overweights are generally settled upon
an affidavit from the shippers.

Q. Do you examined that? A. Yes, sir, and in most cases
all cars are weighed here in the City of New York.

Q. Do you make any special examination of that subject ;

171^

after the affidavit is made do yon act on that affidavit ? A.
Generally.

Q. TVithont any farther examination ? A. If we think the
affidavit is not right we examine further into it

Q. Unless you have <ome reason therefor to suspect the
inaccuracy of the affidavit, yon act upon it and remit the over-
weight or overchai-pe that is claimed to have been made"? A,
Generally.

Q. In what form does that remission or rebate take place?
What i> the wcJus operandi in which that appears upon your
books, and wh.it is the form in which it appears npon the
freight Inlls or books of yonr cinipany ? A. In the form of a
vouch ei'.

Q. Ton give that voucher, don't you ? A. No, sir.

Q. Who gives the voucher? A. It is given by the company;
it passes through a number ol bamls : the voucher is made in
my office.

Q. In your office under your direction ? A. Yes. sir.

Q. Who gives the voucher ; who keeps the record of those
vouchers ? A. I presume the vouchers oi all the money paid
are kept in the treasurer's office.

Q. I must insist npon an answer to my question. A. Ton
mean who keeps the record of the vouchers made in my office;
they are kept in my office.

Q. Who sigus them ? A. Mr. Clark and it. Butter.

Q. Don't yon ? A. Xo, sir ; only in the absence of the
general freight agent I sign them.

Q. Then yon do sign them ? A. If he is absent ; when the
general freight agent is present he signs them.

Q. What proporticn of the cases are there when he is ab-
sent ? How many do you sign compared with the number Air.
Eutter signs? A. Not over five per cent.

Q. Then the subject of rebates and drawbacks and payments
for overweight- and overcharges are submitted in the first iu-
stance to Mr Entter? A. First to me — to my department over
which I have charge.

Q. Ton pass upon them ? A. Yes. sir.

Q. And submit them to Mr. Eutter ? A. The general freight
agent first — Mr. E. Clark, Jr.

Q. If he approves it it goes to Air. Eutter ? A. Yes, sir.

Q. if he approves it, then what ? A. It goes to the auditor.

171

Q. But it goes to the auditor in what shape V A. In pre-
cisely the same shape that we pass it.

Q. Who draws the warraut for such rebate, drawback or re-
mission of the moneys for overcliarge and overweight ? A.
They are also drawn in my ofBce.

Q. Then the record of that whole transaction is from the be-
ginning to the end in your office ? A. Yes, sir.

Q. The only part of it that goes to the Treasurer is the ac-
tual voucher for the payment, isn't it ? A. All the papers go
to him — all the papers we liave; all the freight bills are at-
tatched to the voucher, and are sent to him through the differ-
ent departments.

Q. And then they are returned to you ? A. No, sir.

Q. You never get them back ? A. No, sir.

Q. Bat the book which contains the record of all these
transactions remains in your departnjent ? A. Yes, sir.

Q. And when the pa3mtnt is actually made for such draw-
back, rebate or remission of overcharge, why, you get the re-
cord, do you not ? A. No, sir ; I do not.

Q. Then you do not know after it leaves your office what
becomes of it ? A. I do not ; I do not know whether it is paid
or not, unless I inquire for it specially:

Q. If it were not paid would you not know it by the return
of t!ie papers to your office ? A. I might and might not.

Q. Does not the fact that the papers remain out of your
office and remain in the Treasurer's office, in itself, indicate to
you the fact of their payment ? A. Not by any means, sir.

Q. You therefore part with the records of your office when-
ever an overcharge is chvimed and a rebate or drawback made,
or payment for overweight made, without knowing what be-
comes of tlie records in your office ? A. The records are in my
office but not the papers.

Q. Without knowing what becomes of the papers, which un-
der ordinary circumstances would lemain in your office ? A.
No, sir.

Q. You don't know? A. No, sir.

Q. And these are the original papers, are they not — freight
bills, way bills and other filled blanks, showing the course of
the transaction of that particular article of freight ? ' A. Yes,
sir.

Q. You have no check in your department upon the Treas-

172

urer's office as to what was paid or not by these claims made
originally to you and your office ? A. No, sir.

Q. Do you make agreements yourself by which rebates or
remissions are made for overcharge ? A. No, sir ; not for
overcharge ; in no case.

Q. Well, rebates ? A. Overcharges or rebates.

Q. Don't you make arrangements in relation to the general
remission or return of money for overcharges ? A. No ; I
agree to carry property at a specified price ; sometimes that
property is overcharged ; I then draw a voucher, as I stated to
you before, and it passes through those several hands for ap-
proval.

Q. And after approval, you don't know what becomes of
it ? A. No, sir.

Q. Are there not some shippers who habitually have claims
for overcharges, and whose claims are allowed ? A. I have no
recollection of such at this time.

Q. Are you willing to swear that there are no shippers who
habitually get remissions on the rates that they are charged ?
A. I could not swear to it, because I don't know.

Q. 'J hen, you don't remember anything about that ? A.
No, sir ; nothing in particular.

Q. You don't know whether there are or are not ? A. Not
positively ; nothing that I can swear to.

Q. They may be without your knowledge ? A. Yes, sir.

Q. Shippers who habitually get rebates for overcharges ?
A. I don't know of any single one ; I don't know as there are
an)', but still there may be.

Q. Do you make contracts upon the basis of shipments all
the year round ? A. I doii't make any contracts, special rates
or special tarifis.

Q. Special rates or special tariffs on the basis of shipments
all the year round ? A. Yes, sir.

Q. Does that also depend entirely upon the honor of the
man that makes the contract with you ; have you nothing
written ? A. I don't remember a single contract..

Q. When you catch a fellow that has shipped by canal, after
the agreement to ship with you all the year round, what do
you do with him ? A. Then I may charge him a tariff; I
don't know of any case.

173

Q. You don't remember any case ? A. No ; I cannot recal
one single case at this time.

Q. Of any failure to keep that contract with you ? A. It is
not a contract ; simply a special tariff.

Q. You said, didn't you, that some of these contracts are
made on the condition that the shipper would ship on your
road all the year round ? A. Yes, sir ; it is a promise on his
part ; there is no agreement because we cannot enforce the
agreement.

Q. How does he make that promise — verbally or in writ-
ing ? A. Most generally, verbally.

Q. Now, I ask yon again the question : When you catch a
man shipping by canal, who has promised you that he will
ship with you all the year round, what do you do with him ;
how do you punish him ? A. I might stop the rate if he had a
special rate.

Q. And that you do even if you have a time contract with
him, don't you?

Mr. Depew — He has testified that he had no such case.

Q. No ; answer my question, if you pleise ; when you have
made a contract, how does that contract exhibit itself to you,
all verbal? A. All verbal; all that I can remember are ver-
bal, except such as are made by letter, as I stated before.

Q. In other words, all are verbal except those that are not ?
A. Yes, sir.

Q. What proportion do those that are not, bear to those
that are verbal ; these contracts, by which they agree to ship
with you all the year round ? A. I could not tell you ; I have
not the slightest recollection at this distance of time ; in fact,
I don't know that they do agree in many oases.

Q. Have you ever entered into any computation as to how
much it costs you per ton a mile to haul freight on your road ?
A. I have not.

Q. Have you ever examined or investigated the subject of
how much it costs the railway company, of which you are the
general freight agent, per ton per mile to haul freight upon
your road ? A. Not specially.

Q. Do you know ? A. I do not, except what I see in the
reports.

Q. And you have never taken the trouble to ascertain, with
any degree of accuracy, how much it actually costs your road

174

to do its business ? A. Not all the expenses of the road par-
ticularly.

Q. You have no means of knowing ? A. No.

Q. You have never entered into the engineering question of
the influence of curves on the cost, or the bulk of the traffic on
the cost, or any question of that kind ? A. I have given the
matter some thought as to the cost of transportation.

Q. Can you tell us, for instanco, what difference the gradient
and cost of fuel makes iu the cost of transportation upon your
railway ? A. I could not.

Q. Do you know how much fuel is consumed in hauling a ton
of freight on your road, per mile? A. I do not.

Q. Do you know how much the expenditure of a train of cars
is on the haul from New York to Buffalo, or on the haul from
New York to Albany, or eastward or westward between any
of these points? A. I have not given it any particular thought;
I have not had time for that.

Q. Do you know how much it costs per train per mile to
haul goods upon your line from any given point to any given
point, or from New York to Buffalo, or Buffalo to New York,
or any point intermediate ? A. I do not, with any certainty.

Q. Do you know anything about the cost of maintaining the
permanent way on your road? A. No, sir.

Q. The cost of replacing the cars upon your road, or the
motive power or the cost of fuel ? A. I have given the sub-
ject no attention.

Q. Your rates from New York to local points are higher,
are they not, than your eastbouud rates? A. I don't think
they are.

Q. Look at your schedule ? A. They may be on certain
classes.

Q. Are your east or west bound freight rates to local points
higher ; your present schedule of rates — are they higher to local
points eastward or westward ? A. On the upper class of freight
they are highest east bound ; on the three upper classes.

Q. And on the lower classes? A. They are about the same,
east or west bound.

Q. Now, this schedule that you have just shown me, headed
" Spring Arrangements, 1879 " — how long do you now antici-
pate that this tariff will remain in force ? A. It is not now

175

in force — this particular one ; I told you yesterday, you know,
that we adopted a subsequent one.

Q. Not yet printed ? A. Yes, sir ; you have got it there.

Q. From Utica to New York you charge on the west bound
for first class, you charge 51? A. No ; on the east bound 51 ;
the west bound tariff is 33.

Q. Now, how long do you anticipate that this schedule tariff
will remain in force? A. It may remain in force all summer.

Q. Then it will cover the months of August and September,
won't it, in all probability ? A. The west bound will — it
may.

Q. Why not the east bounrl ? A. There may some changes
take place between now and August which 1 cannot now fore-
see.

Q. But unless these changes take place, this schedule of
local rates will remain in force all summer ? A. Yes.

Q. Didn't you tell me that the reason why you made ■ those
lower rates on east bound freight on these special classes of
fourth class freight, to wit, potatoes and grain, is because you
wanted to fill your cars east bound during the summer when
there is not much freight offered ? A. I think I did ; that is
one reason, asl stated to you.

Q. And that is the reason why you charge ou eastbound
freight from Utica higher than yoir do on westbound ?
A. I don't say that at all, because there is very little first
class freight moved, as you notice ; the fourth class freight you
have not got there : the fourth class is covered by these special
tariffs.

Q. Then on east-bound you have not any fourth-class tariff
at all? A. No, sir; not printed; you have the tariff, right there
in manuscript.

Q. But I haven't any which covers the year 1879 ; why is
that ? A. I have just got it now ; I told you this morning I
hadn't time to prepare it.

(Witness presents tariff to the Examiner.)

Mr. Steene. — I desired to have these marked May 24th and
April 30, 1871).

(Marked "Exhibit 6, June 18, '79," and "Exhibit 7, June
13, '79."

Q. Here are two tariffs, marked respectively, Nos. 6 and 7

17(5

(handing papers to witness), of this date ; tell us what they
are? A. The eastbound tariff on fourth class freight.

Q. Is there any westbound tarifi' there? A. No, sir; be-
cause yon have got it before j^ou there.

Q. Tlien the westbound tariff is tlie printed tariff? A.
Yes, sir.

Q. That does not vary as this one does? A. No, sir.

Q. On fourth class freight? A. No, sir.

Q. And the reason of that is because of the great variations
that take pljice in the freight charges from the west ? A. That
is one of the reasons, sir.

Q. That reason would not apply as to those articles which
are not carried from the west, like potatoes, would it ? A.
Not altogether.

Q. Would it at all? A. Not that particular reason.

Q. What other reason, then, would apply? A. The quan-
tity of freight offered for transportation.

Q. Why don't you vary your westbound tariff on fourth
class on the principle of the quantity of freight that is offered
for transportation ? A. The westbound shipments as a rule
are mere uniform than the eastbound.

Q. Youi eastbound rates are higher than your westbound,
on fourth class? A. They are not.

Q. Are they lower ? A. At this particular time they are
somewhat lower.

Q. And you have testified that. you ran a larger proportion
of cars empty from New York to the west, than east ? A.
Not from New York alone ; on the whole route ; we carry
more loaded cars from the west than the east.

Q. And you have stated that about a tnird of your cars run
back empty, haven't you? A. I should say that was my
belief ; whether I am correct or not, I don't know.

Q. Then couldn't you afford to carry west-bound traflSo
cheaper than eastbound, on any principle of commercial
transactions — that you have more demand for car room east-
bound than westbound ? A. Not very well.

Q. Doesn't it cost you almost aa much to haul an empty car
back to Chicago ns a full one? A. I think not ; still I don't
know ; I have not given the matter any special attention.

Q. Don't the Engineer of your road, or the Superintendent

J 77

give you annually some report of the cost of tj-ansportiiif?
freight on your road from point to point ? A. 'J'hey don't.

Q. You get from the other departments of your railway
administration no information or reports which give you any
data as to tho cost of transpoitation upon your road from
point to point? A. I suppose I could get Ihem if I should
ask for them.

Q. You don't get them as part of the ordinary routine of
your office ? A. No, sir.

Q. And you dont call for them ? A. No, sir.

Q. You have explained to us that the reason which operates
upon your mind in making the distinction between flour and
potatoes is, because flour is dearer than ])otatoes!' A. I
merely mentioned that incidentally.

Q. Do you mean to say a barrel of potatoes weighs more
than a barrel of flour? A. A barrel of flour weighs more than
a barrel of potatoes ; we don't make a rnte on potatoes by bar-
rels ; the rate I gave you yesterday was by the hundred.

Q. They are shipped in barrels, aie they not? A. No, sir;
in very many cases they are .shipped in hulk.

Q. That makes it still more convenient to carry them? A.
No, sir ; it makes it worse.

Q: Then there would be a reason so far as the trouble to
the railway is concerned for charging more on potatoes than
on flour, which is more readily handlfd, wouldn't it? A. No.

Q. Didn't you just tell me that the shipment of potatoes in
bulk makes it more difiScuIt to handle than shipping them in
barrels ; did I understand you right ? A. Yes ; you under-
stood me correctly.

Q. Is there any difference in the handling of a barrel of
flour and the handling of a barrel of potatoes ? A. 1 am not
aware of any.

Q, There is not any, is there ? A. No.

Q. Therefore if your freight charges are dependent in any
degree upon the trouble to which your company is put as to
terminal handling of the fieight, and the expense to which
your company is subjected in such terminal handling, then
there would be reason, would there not — if, as you have testified
potatoes are more difficult to handle in bulk than when put in
barrels— for charging more ioi- potatoes when they are trans-

178

sported in bulk than for flour? A. There would be under
ordinary circumstances.

Q. You mean by that, don't you-, there would be if the cir-
cumstance which determines your charges were the expense of
the terminal handling of the article that you carry ? A. That
enters into the rate to a certain degree.

Q. But it evidently does not enter into the rate as between
barrels of flour and potatoes in bulb, does it ; because you
charge less for potatoes in bulk than you do per hundred for
flour, which you have testified you have more trouble in
handling ? A. Yes, but I don't think we charge at times any
less for carrying potatoes tlian flour.

Q. By your tariff now in force making this sub-division into
four classes, don't you in fact charge considerably less for
potatoes than you do for flour ? A. At this particular time the
rate on potatoes to Lockport, if you please

Q. Not " at this particular time ;" you have already told us
why this particular time was no guide for potatoes ? A. Our
tariff now on potatoes

Q. I don't want your tariff now, because you don't ship any
now ; I want your tariff in September ; you have already testi-
fied— and you have a good memory — that the shipments are
made of potatoes in September, and that is the reason you make
your rates then, and if that be so, I want to know whether your
shipments in September of potatoes are not carried at lower
rates than your shipments of flour? A. In September the rate
on potatoes was four cents a hundred higher than on flour.

Q. From all points ? A. All points ; it averages from three
to four cents.

Q. Just look here, (referring to a schedule) ; ten cents from
Schenectady as against eighteen cents for flour ? A. That' is
eighteen cents a barrel, and this is ten cents a hundred ; flour
is always carried by the barrel, and our price is by the barrel.

Q. Then you charge more for potatoes than you do for flour,
is that it ? A. Sometimes we do, not always.

Q. On what principle does it vary ? A. I stated to jou yes-
terday, if I remember correctly, that the rate of flour was
based upon the rate from the West ; if the rate from the West
is high, we make our rate from Buffalo and other points to cor-
respond, proportionately, as near as we can get at it ; potatoes

179

are not generally shipped from the West ; there may be times
when the rate on flour is higher than it is on potatoes.

Q. Then the question of the relative charges for potatoes and
flour has nothing to do with the va'ue of the article ; is tliat it ?
A. Not as a rule, but it has in exceptional cas«s.

Q. Only in exceptional cases, and it has nothing to do with
the difiSculty of handling? A. It has something to do with
that at times.

Q. But only at times ; now what are the times when it has ?
A. In the summer time and in the early fall, when we have
plenty ot cars at our disposal we don't mind carrying potatoes
in bulk ; there are times in the year when we cannot handle
them with any convenience ; there are times in the year when
we have five or six or seven hundred car loads of potatoes
here; people can't sell them; they remain in our cars, and
then, of course, we make a higher rate to keep them away.

Q. Then the principle of having plenty of cars at your dis-
posal does not govern you in your west-bound freight, be-
cause you have always plenty of cars always at your disposal
west-bound, as you have already testified that you have one-
third running empty west ; that principle does not govern you
at this end of the line ? A. It does to a certain extent ; we
do not always have cars here for westbound freight.

Q. Haven't you generally — one third of your cars run back
empty ? A. They don't run back from New York ; those cars
that run west empty are not such as you can load dry goods
In, or sugar — such goods as are shipped from New York gen-
erally ; there may be cars containing oil.

Q. They may be ? A. Well, there are a great many of
those cars.

Q. The bulk of your cars are grain cars, are they not, and
you can ship any sort of goods in grain cars ? A. We could in
grain cars.

Q. Are not those the bu'k of your cars ; haven't you already
testified that the bulk of the goods that you deliver within the
State are shipped on cars that you don't use for westbound
traffic at all ? A. Yes, sir.

Q. What principle governs you in the rates of classification?
I lind upon your schedule here in evidence four classes ? A.
Yes, sir.

Q. Making a distinction on an average of 100 pei' cent, be-

180

tweeu, the first class and fourth class, and corresponding dif-
ferences in percentage for carriage between the second and
third as there is between the first and fourth? A. The classi-
fication in a great measure is

Q. Now I want to know not what is in a great measure or in
a small measure ; what determines you in making that classi-
fication ? A. The value of the property and the bulk of it ;
those are two reasons.

Q.' These classes are so many cents a hundred, are they not?
A. Yes, sir.

Q. What has the bulk to do with that question ? A. We
only get a thousand pounds of a certain kind of freight on to a
car, while other kintls of freight we can load twenty thousand.

Q. The capacity of one of your cars is calculated at twenty
thousand pounds ? A. Ten tons ; yes, sir.

Q. And the train is composed of about thirty cars, isn't it?
A. I believe so.

Q. And going back empty about forty, isn't it? A. Perhaps
so ; might be fifty.

Q. You say that the determining question with you in mak-
ing the difference in the classes is the value of the goods, and
its bulk ? A. Yes, sir.

Q. Which determines you more largely in your classifica-
tion ? A. I should have added another item, the quantity ; the
value, the bulk and the quantity in which it is usually
shipped.

Q. The value, bulk and quantity in which it is usually ship-
ped ? A. To which it is produced, if you please.

By the Chairman :

Q. Does the quantity shipped throughout the year have
something to do with determination of the classification ? A.
No ; sugar we carry at a less price than we do dry goods ; it is
because there is a greater quantity of it used and it is less valu-
able.

By Mr. Sterme :

Q. I want to know the principle that underlies this classifi-
cation, if there is any ? A. As near as I can remember now it
is the value of the goods and the bulk of them.

181

Q. Who makes the olassifioation ? A. These classifications
have been in use fov a number of years ; thoy have been
modified from time to time, but have really been used for a
great while.

Q. You found them in force when you went into the office ?
A. Not as they exist now, but something similar to it.

Q. To a considerable extent ; substantially as they exist now ?
A. Yes, sir.

Q. We won't quarrel about trifles ; you continued them in
force as ycu found them? A. Yes, sir; with some modifica-
tions.

Q. Did you make special inquiry as to whetlier they were
soundly classified ? A. Yes, sir; in consequence of that we
made modifications from time to time.

Q. To what class would feathers belong? A. I think they
are down there as double first class, if I remember right
(referring to the schedule) ; yes, here they are, double first
class.

By the Chairman :

Q. What does that mean — double first class? A. Twice
first class.

By Mr. Steene :

Q. On what principle do you put porter and ale in glass in
the first class and alcohol, domestic liquors and whiskey in
the fourth class ? A. Ale and porter in glass is of a perishable
nature, and is bulky also.

Q. When ale or porter perishes from natural causes on your
hands, do you pay the shipper in consequence of such de-
struction of his article ? A. What do you call natural causes?

Q. You say it is of a perishable nature ; if ale or porter
should turn sour while in process of transportation, do you
consider yourselves liable to the shipper to pay him the value
of his porter or ale ? A. If we break bottles we do.

Q. You dont answer my question ; you state that the
articles are perishable ? A. Yes, sir.

Q. If they spoil on your hands from causes over which you
have no control, do you pay the shipper the loss occasioned
thereby ? A. Not if they turn sour.

182

Q. Do you pay him when the shipper has agreed by a fi eight
coutract that he makes with you in accepting a printed form of
shipping receipt exempting you from loss by breakage — do you
pay him then if his goods break ? A. If they are broken
through carelessness on the part of our company we pay ; yes,
sir.

Q. Then the only risk that you run, and which puts that in
the first class, as contradistinguished from what is put in the
fourth class, alcohol and high wines, whiwkey and liquor, is the
risk arising from your own negligence ; is that so ? A. Or from
loss.

Q. That is again your negligence ? A. Not altogether ; we
cannot alwaja guard against loss.

Q. If it is a loss that is guarded against by your ordinary
form of shipping receipt then you don't pay for its loss ? A. I
cannot say positively as to that.

Q. If there is a loss, arising from your negligence, on this
alcohol, high wines, pure spirits, domestic liquors and whiskey
you have got to pay also, whether you put it in the first class
or the fourth class? A. We pay a certain amount.

Q. Tou don't mean to have this committee understand that
liquors are cheaper than ale ? A. In this way it is ; if we
break a barrel of whiskey, or lose it, we only pay $20 for it, or
brandy, or anything ; I believe you will find it so in the classi-
fication.

Q. Then the only reason of a difference between first class
and fourth class is the difference of what you consider your
responsibilitj' in the premises, is that it ? A. I don't say that;
I said the value of the goods, and I said •

Q. How much is a barrel of ale worth — do you know — in
glass — put in glass, packed in barrels ? A. It may be worth
$10 or $1.5.

Q. Therefore such a barrel as that subjects you to a liability
of half the amount which you are willing to risk on fourth
class articles ? A. A barrel of ale in glass will weigh perhaps
100 pounds or 120 pounds, but a barrel of whiskey or alcohol
will weigh 350 pounds.

Q. How does that make any difference in your charge
per hundred pounds ? A. Because it is bulky ; a barrel of
ale in glass is as bulky as a barrel of whiskey ; one weighs

183

120 pounds, perhaps, and the other 350 ; they both occupy
the same space in tlie car.

Q. Then, is btilk the determining question with you as to
whether it is to go into first or fourth class ? A. I have said
so once, I believe, in reply to a former question.

Q. Now, tell me what difference there is in bulk between an
iron snfe and hams and shoulders in casks ; do the iron safes,
compared witli the number of pounds that it has, weigh more
or less than the hams and shoulders in casks? that is, com-
pared to the weight, which takes up the most room ? A. I
should think a safe would take up a great deal more room
than a cask of hams.

Q. Per hundred ? A. Ye.s, sir.

Q. Do you mean to say that ac iron safe— one of Herring's
safes — would, per hundred pounds, take up more room than
hams in casks ? A. No ; 1 would not say that ; I did not
mean to say that.

Q. Then, the hams and shoulders take up more loom than
an iron safe, per hundrerl, don't they ? A. Yes, sir.

Q. Considerably more ? A. Yes, wir.

Q. Four times as much, wouldn't they ? A. No ; I don't
think they would ; they might, though.

Q. Yet, you put hams and shoulders in fourth class, aud put
iron safes in second; how do you account for that? A. An
iron safe is worth from $2,000 to $4,000 ; a whole car load of
hams is not worth but $300.

Q. Then it is not bulk which determines which class it is to
go into, it is the value of the article ? A. I have stated to you
that it was the value and the bulk, and some other reasons.

Q. You mean by that, that when you cannot determine the
question in favor of the railway company by reason of its
bulk, you determine it in favor of the railway company by
reason of its value ? A. Not at all, sir.

Q. Then upon principle — what relation does the question of
bulk, as compared with value, bear, to your mind? A. I am
not prepared to answer that without studying the thing over a
little bit ; it seems you are determined to catch me at every
point.

Q. Mr. Depew will tell you I know nothing about these things ;
you know all about them ; oh ! I see Mr. Depew is not here ;
how does the question of bulk in such a case determine your

1S4

discretion when vou take into consideration tliit you can only
put ten tons into a ear in any event, as to all matters where
your articles would weigli teu tons — within the compass of the
contents of a ear? A. Tou want to know what the difference
is between carrvinfj a car load waigliing ten tons of dry goods,
if you please, representing a value of S.'iO.UOO, and a car load
of iiams, weighing ten tons, repieseuting a value of S500?

Q. No ; well, put it in your extreme way ; what is the differ-
ence to you — to the railway company- — between carrying a car
load of hams and a car load of dry goods, each one weighing
ten tons"? A. Tlie risk, the liability of damage, and liability
of loss, determines the difference in this case.

Q. Is not that risk — assirming that you take the whole risk —
determinable by the rate of insurance covering that risk? A.
The goods are not insured in tiausit on railroads — not a>^ a
rule ; we assume the risk.

Q. But if the railroad company were to insure, assuming
that they carry tliese goods with an unlimited liability,
assuming. that they do not make any freight agreement when
the shipment is made, would not the amount of the risk be
covered by the rate of insurance? A. I don't know anything
about that : I have not given the mr.tter any thought : it is a
new question presented to me.

Q. Therefore, if a company, for instance, were to say that
they would insure your company at half rates against loss on
these several risks that you speak of, that you charge a different
rate as between tirst, second, and tiiird class, as compared
wi^h fourth class, would you refuse all but fourth class? A. I
am not prepared to say at this time ; it would require some
little time to study it ; it might require a week, or ten days, i.ir
a month, io look this matter over and give it proper attention.

Q. You have never given that subject an}- particular thought?
A. I have to some extent, but I am not prepared to talk about
it.

Q. Is there any difference in e.Kpense to the railroad com-
pany in the haul fi'om any point to any other given point de-
pendent upon the class of the goods which fill the car ; do you
understand my question ? A. I don't fully ; no, sir.

Q. Assuming the doors of the freight car to be shut and all
the cars to be full, and you have a train of thirty cars contain-
ing first, second, and third and fourth class freight, each one

185

ten tons, and they are laden, and they all start from the New
York Central & Hudson River Railroad Depot with a locomo-
tive in front of them ; is theve any difi'ereuce as to the cost to
the company in the haul from that depot to any given point
dependent upon the difference of class to which this freight
belongs ? A. If there is no accident it might not be an addi-
tional cost.

Q. You don't answer my question ; is there any difference to
the company in the expense of the haul — hauling these goods ?
A. I don't think there is ; that is while the goods are in tran-
sit, and if nothing happens to them while they are in transit.

Q. Now let us come to the question of terminus ; have you
ever given any consideration to the question of how much of
the expenses of transportation is due to terminal handling of
the goods, and how much of it to haul V A. Not to such an extent
as to be prepared to talk about it, or give intelligent answers.

Q. Then you would not be prepared to testify as to any
given point ; taking Utica as an example, how much is the ex-
pense of haul to the company, and how much is the expense of
terminal handling at the two points. New York and Utica ?
A. I don't think I could give you the relative cost.

Q. Well, I would like to know ; I don't want your guesses,
because I have an expert's testimony on the subject ? A. I
can't tell you positively.

Q. You have no knowledge on the subject ? A. No positive
knowledge.

Q. I don't want to catch you at all ; but how accurate is
your knowledge on that subject ; have you given it any real
study or thought ? A. I have given-it some thought ; I should
think it would cost about three cents a hundred, or sixty cents
a ton to handle freight.

Q. At any point ? A. At some points ; take it at Utica, that
is, mere handling.

Q. And at New York ; you mean both handlings? A. Each
way.

Q. You mean each way, both handlings ; there are two
handlings ? A. Two handlings.

Q. Each way ? A. Yes, sir.

Q. One at the Utica depot, and one at the New York depot ;
and your estimate is that it costs you, simply to handle these
goods, three cents a hundred ; is that your estimate ; A. I am
12

186

inclined to think it wonld cost that, but I could not say posi-
tively.

Q. Upon what do you base that guess : have you ever made
any estimates of the actual cost? A. No ; I have not.

Q. Then it is a mere guess ? A. It is a guess ; yes, sir.

Q. Have you any guess about the subject of the haul?
A. No, sir ; I have not the slightest idea ; I would have to go
to work and figure it out, and it would require some little time
to do that.

Q. Your absence of knowledge on that subject would be true
between any other point in the State as well as Utica ; you
don't know what it costs to haul, and how much it costs to
handle per hundred ? A. I cannot say positively at this time
but I can inform myself, if you wish.

Q. Now, for instance, I see that tobacco in bales you put
into the first-class, and hoops and hoop poles into the fourth-
class ; are not hoops and hoop poles considerably lighter in
weight, as compared with the bulk, than tobacco in bales?
A. I think not.

Q. How much does a pressed bale of tobacco weigh ? A.
Perhaps leaf tobacco 150 pounds.

Q. Not more ? A. I think not.

Q. How much bulk would that occupy? A. It may be three
feet in diameter ; I am not positive.

Q. And hoop and hoop poles ot three feet in diameter would
weigh 160 pounds? A. I don't know; I think they might;
hoops and hoop poles we carry by the car load always ; they
are not shipped in small quantities at all ; they are not worth
anything.

Q. You put in the fourth-class hoops and hoop poles less
than a car load ? A. Yes, sir.

Q. Are these hoops and hoop poles more readily or less
readily handled than a bale of tobacco at a terminal point ?
A. I shonld say it was about the same.

Q. Then the question of terminal facility, or ease with which
the article in question may be handled at the termini, does not
determine the question with you whether it is to go into the
first or the fourth class ? A. It does to a certain extent ; not
in all cases.

Q. Have you a principle which guides you in that respect
in determining which is to go into the first and which into the

187

fourth class ; or, is it not each individual case, again, upon
which you act ? A. I believe I have stated to you that this
classi6oation is determined upon the value and the bulk of the
goods in part; the terminal charges did not come into con-
sideration in making this classification.

Q. Then the terminal charges do not enter into the considera-
tion at aU in making this classification — is that what I under-
stand you now? A. Not particularly, at this time.

Q. Well, it either does or does not — you say it does not? A.
I am not prepared to say that it does not.

Q. Are you prepared to say that it does ? A. It costs some-
thing to handle it ; and it comes in to a certain extent.

Q. I will take your answer whichever way you choose to
make it? A. Call it either way, then.

Q. Call it either way ; well, we will have it that way, then ;
what is the distinction between the third f nd fourth class ;
upon what does that depend ? A. The same as the other
classes ; the bulk and value to a great extent.

Q. The second and third the same ? A. The same ; and
the first and second.

Q. Indeed, your answers, as between the first and fourth
classes, must apply witiiout any special interrogation in rela-
tion thereto, to the intermediate classes as well ? A. Yes, sir.

Q. You have testified- that you could become familiar with
the statistics of the expense of hauling and the expense of
terminal handling, if you saw fit ? A. If I had the time.

Q. Do you mean to have us understand that there is in your
office — I mean in the office of the New York Central & Hudson
Eiver Eailroad Company— any record kept by which the com-
mitter can determine that question ? A. I don't know of any,
sir.

Q. Then, when you said that you could acquaint yourself
with these facts, you had no reference to anything that is con-
tained in the books of the corporation ;• A. None at all.

Q. When you give a man a special rate do you allow him to
farm out that special rate to other people ? A. Not knowingly ;
no, sir.

Q. When you catch him doing that what do you do with
him ? A. I call him to account.

Q. How ? A. Ask him why he did it ?

Q. Suppose he answered " I did it because I felt like it,"

188

■what would you do with him, then ? A. I don't know ; I have
hot had such a case.

Q. Yon know what I mean ? A. I do, perfectly ; give one
man a special rate, and he allows other people to ship under it.

Q. That you would consider a matter of bad faith ? A. Yes,
sir ; disjionesty.

Q. Why do yon consider that bad faith ? A. Because the
tariff is given to one particular party.

Q. But, if the railway gets the shipment, what difference
does it make to the railway? A. I am not prepared to say at
this time ; but, it is merely au action of bad faith ; the other
man, if he wanted to ship might have got the same rate pre-
cisely— perhaps would have got the same rate.

Q. But you, in each individual case want to determine
whether or not a special rate is to be given ; and that is the
reason, is it not, why you consider it a matter of bad faith ?
A. I don't consider it right for a man to obtain a special rate,
and allow others to ship under it ; I don't hardly think it is
the thing, leaving all other questions out of the way.

Q. Although the company gets the same amount of goods
you would still consider it bad faith ? A. Yes, sir.

Q. Explain to me, if j'ou please, the modus operandi of mak-
ing up a local freight-train to a point in the interior of the
State ? A. Making up a freight-train ?

Q. Yes. A. I don't know as I could describe it particularly;
I have seen it done.

Q. Y"ou have seen it done often enough, have you not? A.
Yes, sir.

Q. Suppose a fieight-train should be made up for Schenec-
tady, how long do the goods accumulate before the train is
readjr ; or, do you as each car-load is filled attach it to a
freight-train that goes through to Buffalo and drop it at
Schenectady ? A. We run local freight-trains containing cars
to each station, and drop them off.

Q. That is what I want to get; I want to get at your modus
operandi in relation to local freight ; is it your habit to make
up local freight-trains ; or, do you have through freight -trains
dropfiing cars at local points? A. We have both; we have
local freight-trains hauling freight from one place to another ;
and we also haul local freight on through ti'ains.

Q. What determines the circumstance ? A. It is governed

189

by circumstances which I am not able to explain to you just
at this time ; I don't know ; but I do know it is done ; we run
local trains, and also haul local freight on through trains.

Q. Who determines that question ? A. The Superin-
tendent.

Q. Not you ? A. No, sir. n

Q. What difference is there in the expense to the railway
company between the shipment by a particular shipper of a
, car load (by one particular shipper, understand me right),
and the shipment of a car load by twenty different shippers to
the same point ? A. I cannot give you the average differ-
ence; there is a difference.

Q. Is there any difference of an appreciable character be-
tween filling a car for one particular shipper at New York for
Utica and filling that same car for twenty different shippers
for Utica, assuming the car to be full? A. There is some dif-
ference ; yes, sir.

Q. In what does that difference consist ; and how much does
it amount to ? A. It consists in the difference of way-billing.

Q. Isn't that the whole of it; isn't it the mere clerical
making out of a way-bill- on which there are twenty entries in-
stead of a way-bill on which there is but one ? A. A car load
of freight containing property for twenty different parties oc-
cupies more room in the freight houses also.

Q. How would that be if the contents of the boxes are the
same as for the one shipper ? A. They have got to be tallied
with different marks ; if we have a car load of goods for one
man we can pile them all in a heap.

Q. Then, in addition to the difference you have named, of
the way-billing, the only other difference that you can think
of is a little difference in space ? A. It is a good deal of dif-
ference.

Q. Well, a good deal of difference — in the space that twenty
heaps occupy in the freight-house as compared with one ? A.
These are some of the things ; yes, sir.

Q. I want to know all the things ? A. It requires the em-
ployment of an extra tallyman to take down the different
marks.

Q. Why an extra one ; why could not the same man do it
that did it for the one man ? A. If we had twenty car-loads
for one we would not require but one ; but if we had twenty

190

car-loads containing different shipments, we might require two
or three tallymen.

Q. You have not any means of gauging that, have you —
determining that? A. We generally know pretty well.

Q. What other difference do you think of ? A. I cannot
think of any just at this time.

Q. Then, the difference is one that relates merely to the
terminal handling, and no difference whatever as to the haul ?
A. I don't know as it has any bearing upon the hauhng; I
don't know as it has — the mere bulk of the car.

Q. Do you deliver the shipments made by you, and do you
collect the freight made through your company?. A. No, sir.

Q. You do not ? A. No, sir.

Q. All the freight that is carried by your road is brought to
you by the shipper and taken from your depots by the con-
signee ? A. That is the rule, except some freights — say sugars,
for instance — you have got to send a lighter for them — some
sugars.

Q. Those are very rare exceptions ? A. Well, those are the
exceptions — that is one of the exceptions.

Q. What other freight? are there ? A. There is a great deal
of freight that comes in by steamer from abroad, or comes in
from some other point, and we have got to send lighters for it.

Q. You have told. us something about the numerous points
to which you make special rates ; tell me, don't you carry
large quantities at schedule rates to different points — whole-
sale quantities at schedule rates ? A. I hardly think so.

Q. What in your own mind is the distinction between retail
and wholesale ? A. It is a difference in the quantity.

Q. What quantity ? A. The wholesale man may ship twenty
times the amount, or a hundred times the amount.

Q. I asked you a question, whether you did not carry whole-
sale quantities at schedule rates to different points in the
State of New York, and from different points in the State of
New York to New York City ; and you answered me that you
think not ; that those are all carried on special rates ; now,
you must have had in your own mind, when you made that
answer, some conception of what I meant by wholesale ; now,
what is your conception of a wholesale shipper ? A. A man
that ships in the course of a year five hundred car loads of

■ 191

freight and sells it again to retail dealers at different points,
either at the point where he resides or other points.

Q. Then anything less than five hundred car loads a year is
not a wholesale shipment? A. I don't say so, by any means ;
I only give yon that as an instance.

Q. Now, I want to know what the minimum, not what the
maximum is ; I want to know what the minimum is that you
consider the wholesale rate ? A. It is a difficult matter to
tell.

Q. You have no standard, have you ? A. No regular
standard.

Q. Have you ever made a special rate to a shipper after he
had shipped his goods at schedule rates, and discovered that
the same quantity was shipped at special rates to the same
place? A. I cannot recall any instance of that kind at
present.

Q. Do you understand my question ? A. Yes, sir.

Q. Suppose I, at Utica, were to discover that you had haul-
ed at schedule rates for me a car load of groceries, and that
for the same quantity of shipment you had given a special
rate to somebody else, have you had cases of reclamation upon
your company for a rebate or drawback to put that shipper
upon an equality with the one who had a special rate ? A. I
cannot recall any special cases of that kind just now.

Q. What would be your course of conduct in such a case ?
A. I am not prepared to answer until the emergency arises.

Q. You are not prepared to-day to say to this committee
that in such a case you would put the man for whom you had
made the haul upon an. equality with the maa with whom you
made the special rate ? A. I certainly could not say that.

Q. What is called your freight "rate covers both the expense
of terminal handling, doesn't it, and the expense of the haul-
ing? A. Yes, sir ; in most cases ; in some cases the shippers
unload the freight themselves and handle it themselves.

Q. Then that, of course, would not appear in any freight
bill ? A. Not in the regular tariff.

Q. Do you give a rebate or drawback for such handling ?
A. No, sir ; none that I can recall just at this time.

Q. Then the answer to my question would be yes, wouldn't
it, when I asked you whether the expense of terminal hand-
ling to the railway is not included in the freight bill as part of

192

one and the same thing — a part of the same thing as the haul-
ing ; you do not make one charge for hauling the goods and
another charge for handling at the terminus? A. We do not
as a general thing.

Q. Do you at any time ? A. I do not recall any circum-
stance now ; still there might be some.

Q. The practice of your railway is to lump it all in one
charge ? A. Yes, sir.

Q. Have you any knowledge upon the subject of what propor-
tion of the moneys that go into your office for freights come
out again in the way of rebates, drawbacks, or claims for
overweight or overcha ge ? A I have not the slightest idea.

Q. Who among the officials of your railway could give me
that information ? A. I don't know ; the treasurer might ; but
I have not any positive knowledge of the fact.

Q. Could or could not Mr. Rutter ? A. I don't know.

Q. You have no means of even approximately getting at that
subject ? A. No, sir.

Q. Do you remember the names of the persons who get these
habitual rebates or drawbacks ? A. I do not ; I don't know
that there are any paid ; I have no knowledge of the fact ; I
have not paid any.

Q. What is your habit in the conduct of your business in
relation to giving passes to shippers ? A. We give passes to
live stock shippers one way, I believe ; and passes to men who
accompany cars loaded with perishable property, such as po-
tatoes— two or three car loads ; that is all I know.

Q. YoLi give no passes to any of your wholesale shippers
along the line ? A. Not that I am aware of ; I do not give
passes any way, and I have never asked for any for anyone.

Q. Who in your corporatiwn has charge of the giving of the
passes ? A. The superintendent gives passes, and some other
gentlemen give passes ; I cannot recall them all.

Q. Are passes issued from more than one office ? A. All
the passes I believe, originate in the President's office, and all
the blanks are furnished from there.

Q. Who issues them? A. I cannot tell you positively.

Q. Have you any knowledge by means of which you can in-
form this Committee as to the principle that governs passes to
shippers, if there is any? A. I am not quite sure that any
passes are given to shippers ; that is, I believe there are not.

193

Q. Or consignees? A. Or, to consignees eitliei', that I know
of ; there has nover been any given on my account, and I
have not asked for any, not for account of freight.

Q. Are there any tickets given instead of pnssps? A. T don't
know, sir.

Q. Do you issue any, or give any, instead of passes ? A. No,
sir; I cannot recall a case that I have given any on accoiint of
freiglit.

Q. Do you give special rates on shipments to points on the
Utica and Black Eiver Railroad ? A. I have given special
rates to Utica ; not to points on the road.

Q. Have you not specird rate^ to points on the road? I can
obtain rates from the General Freight Agent of the Utica &
Black Eiver Eoad on application.

Q. Have you not cases in which you charge a special rate to
Utica, and then the local rate from Utica on? A. I have
nothing to do with the local rate from Utica on.

Q. Do you by special agreement charge as far as Utica, a
special rate instead of the schedule rate, and then leave the
ship]ier to the mercy of the Utica & Black River Railroad,
as to the rate at which he can get his shipment done further
on? A. There may be some cases ; not having any control over
the Black River Road, I cannot make rates there.

Q. The point of my question is, that, to persons on the Utica
& Black River Railroad, there a.ve special rates made by you
as far as Utica ? A. I believe there are.

Q. And the same way from Utica ? A. Yes, sir.

Q. Have you any samples of your freight bills ? A. I have
not — none here.

Q. When those books are produced to-morrow will you
kindlj bring them with you ? A. Yes, sir ; I will bring the
bills if I am here.

Q. The different kinds of fi'eicjht bills, forms, blanks, that
you use in the receipting for merchandise ? A. Yes, sir.

Q. You have stated that the principle on which this classi-
fication is. made between first, second, and third and fourth
class is : first, the increased responsibility of the railway ;
secondly, the bulk of the article as compared with its weight ;
third, the value of the article ? A. Yes, sir.

Q. And that the cost of the haul has nothing to do with it ;
now, on what principle, therefore do you in your special rates
13

19-1

to particuliiv ])ersons througliout the State name but one rate
lor all the classes, aud that rate below yonr fourtli class ? A.
If such a thiug is doue, it may be that they assume all risk in
the i-ase of loss.

Q. I don't want any "luay-be's" and " ifs ; " yon have
already tostitied, iu your examination of yesterday, that such a
ihing is done over aud over auain, that there are particular
shippers at Syr.iuuse and at Utica and at Schenectady who
have rate.-i of ten cents a hundreil on all the classes ; now, such
a thing being, aia'Dvding to 3'our testimony, done, on what
|)rinci|)le do you put those shipments all in one class, when
you make as to tho gtuioral 2)ul)Lc a distinction upon tho [)iin-
ciple that you have named, into four classes '? A. Because I
know that ninoty-five |)er cent, of all their freight consists of
the fourth class — that ninety per cent, of all tho freight that is
shipped by those gentlemen to whom yon refer consists of
fourth class freight — the lowest class.

Q. Have you no special rate to dry goods houses '? A. Yes,
sir ; not of ten cents a hundred ; I have to som -.

Q. What is your lowest special rate to the dry goods houses
at Utica ? A. I believe the lowest rate is twenty-five cents a
hundred ; it may be thirty.

Q. It may be anything ; but what is it ? A. I think it is
thirty ; if I am under oath, yon want me to slate positive
facts.

Q. Of course, now, to Utica, your first class rate is, accord-
ing to this schedule, fiftj'-one cents a hundred ? A. You have
got the wrong tariff.

Q. Well, give me the right tariff' (taking another tariff' j ; to
Utica your first class rate is thirty-three cents ? A. Yes, sir.

Q. This dry goods house has all first class goods, hasn't it?
A. Yes, sir.

Q. Now, what is your lowest rate to Syracuse to a dry goods
house or to a house selling dry goods and other commodities?
A. I believe there are certain wholesale dry goods houses there
who have a rate of twenty-two and a half cents.

Q. Is that the lowest? A. It may be twenty cents, but I
should not want to swear to it.

Q. It may be twenty ? A. Yes, sir.

Q. If it is twenty cents that dry goods house receives a rate
below the third class on all classes ; now on what principle do

195

you then name a rate not in the least dependent upon the con
ditions which induced you to make these four cbissiiica-
tions for the general public ? A. Owing to the quantity they
shipped.

Q. Does not the whole public ship much more than this in-
dividual shipper? A. I don't know as they do, in Syra-
cuse ; there are some certain gentlemen who ship more than
all the rest of the people combined in tlje place ; certain
wholesale houses ; dry goods houses.

Q. Let us confine ourselves to Ihis one dry goods lumse ; do
you claim that this one dry goods house receives larger ship-
ments, to whom you make a rate of twenty-two cents a hun-
dred for all classes, than all the rest of the community of
Syracuse who have dry goods shipments ? A. T do not meau
to say that, because there are two or three large houses in
Syracuse, all of whom have special rates.

Q. Then, the principle upon which you make these classifi-
cations for the general public is entirely lost sight of, is it
not, when you make your special rate ? A. Not altogether ;
no, sir.

Q. Is it not so far lost sight of that it does not make its ap-
pearance in the special rate? A. It does make its appear-
ance ; you notice that we charge a higher rate on dry goods
than on other goods.

Q. The name of Grouse has been mentioned here once or
twice ; does Grouse get any first class freight ? A. He may ;
but I don't think three per cent, of his shipments are first
class ; I don't think one per cent is.

Q. How about second class ? A. He has but very little
second class.

Q. How about third class ? A. He may have some third
class ; I don't know how much ; very little.

Q. Do you enter into investigation in the particular case
when you make a special rate as to the amount that he ships
of the various classes .'' A. We have done so in former times ;
but general knowledge enables us to tell.

Q. Have you ever refused to give as low a rate to a New
York shipper for goods shipped to a given point as you have
given to an interior merchant at that point — the same class of
goods and the same shipment ? A. I might have, under certain

19fi

conditions ; it D:ay depend upon the quantity offered for trans-
portation.

Q. Let me call to your mind a special case ; have you
ever refused to carry for Mr. Babbitt a certain quantity of
soap to a certain point in the interior of the State at the same
rate which you had given at that interior point to a mer-
chant there, for the same quantity ? A. I cannot recall the
case at this time.

Q. You don't remember it ? A. I do not remember it.

Q. Did you ever tell anybody that the reason why you made
so very low special rates to a few persons in the interior on
the line of your road, west-bound, was for the double purpose
of filling your cars and to punish New York merchants, who
had advocated low tolls on the canal ? A. I have never made
such a remark, to mj knowledge.

Q. Didn't you say so to Mr. Austin ? A. I think not ; not in
those words ; no, sir ; I would not punish anybody for the
world.

Q. Never? A. No, sir; I don't think I said so to Mr. Aus-
tin, either.

Q. You arewilling to svi^ear that yon never said you meant
to punish some New York merchants who advocated low tolls
on the canals ? A.I certainly never said so, to my best
knowledge, belief, and recollection ; I should not say so.

Q. What is your best recollection that you said to Mr. Aus-
tin on that point?. A. I don't know that I said anything;
but if I said anything, I might have said : "Gentlemen, you
have forced us into this position by making low rates to in-
terior points."

Q. Now, why were you forced into that position ? A. Be-
cause canal lines, if you please, and other competing lines,
have carried Ireight at extremely low rates ; the prices have
been reduced from year to year, and we were forced to make
such contracts in order to get business and load our cars
back.

Q. That is the reason that you gave? A. That is one of the
reasons ; that is the principal reason.

Q. You have been connected with this railroad compauy
how long? A. About twenty years.

Q. How long have you known this special rate business to

197

have been carried on ? A. Since I have been connected with
the road.

Q. Therefore the custom of giving special rates did not
grow up with the recent reduction on the canals? A. Not to
such a degree ; no, sir ; 1 don't think we could run the road or
make a tariff without special rates ; I don't think it is in human
power to do it.

Q. Do you know anything of the system under which Euro-
pean railroads are carried on ? A. I do not, sir.

Q. Do you know an3'thing about the system whicli prevails
in Massachusetts ? A. Yes, sir ; a good deal about it.

Q. Do yoa think that a railway company running out of
Boston to any point in the interior of the State makes a special
rate to shippers ? A. Yes, sir.

Q. Do you know of any such instances ? A. I believe I do ;
I could not swear to it just at this time ; but I know special
rates have b'='en made and are being made every day.

Q. To consignees in the State of Massachusetts? A. Yes ;
I think so.

Q. Do you know that the law does not allow them to do so ?
A. It may be from Boston to Albany, perhaps.

Q. Do you know of any case in the State of Massachusetts
where a special rate is made on any shipment to a consignee
within the State ? A. I cannot recall the facts just now.

The Chairman — How is that material?

The Witness — I cannot recall the fact just now.

Mr. Sterne — The witness has volunteered testimony that he
don't believe any railway can be carried on — any scheme of
railway charges could be made, except through this system
of speefal rates ; it is an abuse whicli prevails nowhere in this
world except in New York and a few other points in the United
States.

The Witness — It is done almost every day in Massachu-
setts; I can name certain instances where it is done, and must
be done, where a special tariff is made the same as we make it.

Q. Have you at the present time any contract or understand-
ing with any New York jobbing house by which goods sold by
them to retail merchants along the line of your road are carried
at a special rate to diflferent points ? A. I believe there is such
a one.

198

Q. With whom is that made ? A. I cannot remember just
now ; I cauuot tell you the name just now.

Q. You don't remember it ? A. No, sir.

Q. How long has it been in operation ? A. Several months.

Q. How many of such contracts are there made ; is tlieie
but one ? A. I think there is three or four ; gentlemen who
applied for it ; it was done before we reduced our tariff; it was
done to enable them to sell goods.

Q. If you would make such a genernl rate it would enable a
good many more people to sell goods, wouldn't it ? A. Every-
one that has come to ask for special rates, I believe, got them,
if he gave good reason, either New York jobbers or anyone
else.

Q. But how would they find it out if you pledged the man
who got the special rate to secrecy ? A. I don't pledge him to
secrecy at all.

Q. In these cases you do not pledge him to secrecy ? A.
No, sir.

Q. No understanding of secrecy between you and them ? A.
No, sir.

Q, "Why do you refuse to give the name of these houses
then ? A. I don't remember them just now.

Q. There are but four ? A. I don't know but there may be
more than four.

Q. You don't remember a single jobbing house to whom you
have given such a special rate, and they have all been made
within a few months ? A. I thinli one of them is Mr. Leggett ;
I don't know what his firm is.

Q. The others ? A. I don't recollect any.

Q. What is the principle that determines you in making that
special rate, or that class of special rates ? A. The gentleman
came and said he wanted to ship his business over our road,
and wanted to have an equaj chance with other jobbers on the
line of the road.

Q. You gave him a superior chance by giving him a special
rate, didn't you ? A. No, sir ; no superior chance ; you can
call the gentleman.

Q. Didn't you give him a superior chance as compared with
your schedule rate ? A. We gave him a special rate ; but I
believe that new tariff just about covers the rate.

Q. For the time being that your old tariff was in operation,

199

wasn't there a superior chance given to a shipper who asked
for a special rate over the man who didn't get a special rate
and wlio was compelled to pay your schedule rate ? A. I
don't think I have given him any superior chance.

Q. What did they want a special rate for if they had an
equal chance under your schedule rate ? A. They agreed to
givu us all their business ; and they wanted to go up the road
and sell goods.

Q. Then, to the man who agreed to give all his business you
gave a superior 'cliance over the man who did not so agree, in
those instances ? A. We may have done so in those instances.

Q. How much lower was the special rate than the schedule
rate to the points to which you agreed thus to carry their
goods? A. I don't remember just now.

Q. What do you think it was ; what is the per cent. ?
A. I could not tell you positively.

Q. Do the books which have been called for contain a
memorandum or record of that transaction ? A. I believe so.

Q. And of nil of them ? A. Yes, sir.

Q. Are there letters in relation to that transaction — or any
one of them? A. I think not — not tliat particular one, I don't
think.

Q. Are there letters as to any one of those transactions ?
A. I could not remember any ; I believe not ; those gentle-
men called at our office and stated their grievances, and we
were ready to help them.

Q. Didn't other houses make application to you for like re-
mission or relief from schedule rates, and for a special rate ;
and, did you or did you not refuse ? A. I don't remember of
any having called for special rates and not get them ; this Mr.
Austin was at the office several times obtaining special rates
for parties; and I treated him kindly and courteously; and
we were ready and willing to do all that we could to help him ;
he is present here, I believe ; you can call him as a witness ;
he will tell you so.

Q. Then, you are prepared to say that any jobber in New
York who would have called upon you in the past four months
for like rates that you gave to these few whom you thus
lavored, could have had like favors shown to them|? A. I
think so ; yes; on the same conditions.

Q. Then, why do you on that class of goods maintain any

200

schedule rate at all if you are prepared to treat everybody
alike ? A. There are a great many goods siiippeil in small
quantities— very small quantities.

Q. Are there not a great many goods shipped in large
quantities and very large quantities at tlie scherlule rates ? A.
I think not ; not just at this time ; no, sir; not in the State of
New York.

Q. Those four houses, then ship the bulk of the goods over
your road of the class of goods that they do ship ?
A. Yes, sir ; in this Stiite. to local stations on onr line.

Q. They ship the bulk of them ? A. No ; they ship the
bulk of what they ship ; I don't know liow much they ship,
they merely came to me, and said tliey wanted the chance.

Q. Then you don't know how much they ship, as compared
with the rest of the public ? A. I have not the slightest idea.

Q. And the rest of the public is charged the schedule rate,
because they do not call there ; that is it, isn't it ? A. Some
of them are ?

Q. Did not Mr. Austin send as many, or more goods, over
your road as Leggett does? A. I don't know.

Q. And, therefore, the only reason that you now remember
why you gave Leggett a special rate and not Austin, is because
Leggett asked for it and Austin did not ? A. Mr. Leggett
came and wanted to do business on the line of our road, and
he wanted the same chance that others had : and I told him
he might have it; he said to me that we discriminated in favor
of merchants in the interior ol the State, and, if they had the
same facility of doing business, they would ship the same quan-
tity of goods ; and we gave them the chance.

Q. Had Austin the same special rate that Leggett had ? A.
He had whenever he asked for it.

Q. Had he in fact ? A. I dpn't know.

Q. As a matter of fact he had not ? A, No, sir ; I think
not.

Q. Then, as between Leggett and Austin, Austin was cer-
tainly not upon an equality with Leggett as to freight rates ; is
not that true? A. I believe that all the freight that Austin
shipped was carried at special rates, to most points.

Q. Were they shipped as low as Leggett's freight ? A. I
think so ; some even less,

201

Q. Then, you think, as between Anstin and Leggett they at
all events were placed upon an equality? A. I think so.

Q. Now, as between any other grocer and Leggett '? A. I
don't know ; I am not supposed to know all of the grocery- firms
here in the City of New York ; I don't know them.

Q. What was the total east bound tonnage in 1878 ; do you
know ? A. I don't remember,

Q. Is there any book kept which shows that ? A. None in
my possession.

Q. What was the total west bound tonnage in 1878? A.
I don't know ; I have no positive knowledge.

Q. What proportion of the east bound tonnage wiis local and
what proportion was through? A. I could not tell you that
positively.

Q. What proportion of the west bound tonnage was local and
what proportion was through ? A. That I don't know.

Q. What proportion of the income of the New York Central
Railroad, derived from freight, is derived from local tonnage,
as compared with through ? A. I have no positive informa-
tion on that subject.

Q. Have you any information ? A. No, sir ; the annual re-
port will show it, I think.

Q. You have got an office ? A. I don't keep those figures at
my office.

Q. Who keeps those figures ; where can I find them ; from
what officer in your road can I find what the total east bound
tonnage in 1878 was ; what the total west bound tonnage in
18/8 was ; what proportion the nast bound bore to the west
bound ; and what proportion the local tonnage of the State
bore to the through tonnage ? A. I don't know who can tell
you positively.

Q. You, in your whole experience of twenty odd years with
this railway corporation don't know any books in the office of
the company which will give that information ? The treasurer
may have them ; I have never seen them.

Q. Why should the treasurer have them : wouldn't they be
in the freight department ? A. The freight department don't
keep them ; the accountant might keep them ; I don't know
where they are kept ; I don't know anything about them.

Q. Can you tell me what the total revenue from freight of
the New York Central & Hudson Eiver Railroad was in 1878?

202

A. Not certainly ; I saw the State Engineer's Report; I cannot
tell you certainly.

tj. You never saw the State Engineer's Eeport for 1878, be-
cause there is not any such report ? A. I think there is a
prisited report in existence to the State Engineer ; 1 am not
sure about it.

Q. There is for 1877 ? A. 1 think there is one for 1878.

Q, Yon cannot tell, of course, what proportion of this total
revenue came from east-bound, and what proportion came from
west-bound ? A. No, sir.

Q. Or what proportion came from east-bound local, and
what proportion came from west-bound local? A. Not with
any certait^ty.

Q. I don't want cents ? A, I could not state positively ; I
have no personal knowledge.

Q. What is your impression as to the proportion both of
income and of volume that the local trafBc bears to the
through on your railroad ? A. I should not wan't to give an
opinion.

Q. Don't you know that the State report to the Engineer
makes, as to your railroatl, no distinction between local and
through traffic? A. I have not been aware of it, still it may ;
I have not given the thing any particular thought.

Q. Does not, as a matter of fact, the local business of the
New York Central & Hudson River Railroad contribute in
actual sum total a larger amount to the revenues of that com-
pany than the through business ? A. I believe not.

Q. How do you know that giving a special rate benefits
jour road ? A. Because it increases the business, to begin
with.

Q. Now take an individual case : Give me a point on your
line of rail where you have no competition with another rail-
road ? A. Ta.ke Amsterdam, in this State.

Q. Now, taking Amsterdam ; how do you think that giving a
special rate to a merchant at Amsterdam, fifty per cent, below
the schedule rate, benefits your railway and its income? A.
It increases the business ; if the man did not have the special
rate he might ship by some canal line, which runs to Amster-
dam.

Q. It increases your business ? A. Yes, sir,

203

Q. Does it increase tbe business at Amsterdam ? A. Yes,
sir; as I'lir as mamifactuvers are concerned.

Q. How does that operate ? A. The manufacturers at
Aiusteidaiu could not live at all — tliey would have to go out of
the business — unless they were protected by special rates ; I
can prove that.

Q. They could not live unless they had a special rate ? A.
Yes.

Q. But couldn't they live if that special rate v\ ere the rate
to everybody — if it were the general rate ? A. No, sir.

Q. Why; what difference would it make to the manufac-
turer in Amsterdam, he getting the special rate, whether you
give that rate to everybody else at Amsterdam or not ? A.
Couldn't afford it.

Q. Who couldn't afl'ord it ? A. We could not.

Q. But the maij at Amsterdam could atlbrd it very well,
couldn't he ? A. I don't think they could ; if you me:in two
men in the same business, doing the same amount of business,
you can afford to have the same special rate to everybody, and
we are willing to do it, and we do do it ; there are two firms
there in Amsterdam, making carpets, if )ou please, we try, as
near as we can, to give both of tliem the same rate, to enable
them to live.

Q. If your schedule rate on carpets from that place ■<vere,
say, ten cents a hundred, it would enable them to live just as
well ? A. Yes ; that is the special rate on carpets ; ten cents
or twenty-five cents, or whatever it may be ; two men ship car-
pets from Amsterdam.

Q. But you would advertise that as tlie special rate? A. It
is not necessary to advertise it.

Q. That is done by special arrangement ? A. Yes, sir.

Q. Now, does not that practically keep other people from
going into that business ? A. No, sir.

Q. If they look at your rate on carpets and see that your
freight rate from Amsterdam is twenty-seven cents a hundred
instead of ten cents a hundred? A. If they wanted to start,
they would come and ask.

Q. So that whenever tliey wante 1 business, they would
come to your office and ask for a special rate, and then you
would make such a rate as would enable them to start busi-
ness ; is that it ? A. We would try to do so ; yes, sir.

204

Q. And suppose a man were to start business without com-
inp; to you for a special rate, do you go to him and offer him a
special rate ? A. Yes, if he does any kind of a business, I
would.

Q. I put the question to you some time ago that, assuming
a man to have shipped a quantity of goods at the schedule rate,
and discovered subsequently that somebody' else had a special
rate ; 1 asked you what, under those circumstances, you would
do when he came to you and made a reclamation upon you;
and your answer was that you were not prepared to state
what you would do on the subject ? A. No, sir; and T am not
prepared now.

Q. Now, you are prepared to state, however, that in every
case where a man starts a business, or is in business, and is
paying you the schedule rate, you offer him voluntarily a spe-
cial rate ; is that it ? A. That is not the way I have answer-
ed it.

Q. Then, where a man, being in business, pays you a
schedule rate, you don't offer him a special rate so long as he
is willing to pay the sche-lule rate, do you ? A. I don't think
we would ; no, sir.

Q. Your rates from these interior points to other interior
points are not upon any printed or written schedule, you say,
and each case is a special case ? A. Yes many cases are.

Q. Those rates are generally higher than any of these
schedule rates, calculated per mile, per class? A. Not ne-
cessarily.

Q. Xot necessarily, of i;ourse not, but are they not as a
rule ; the rate between Utica and Schenectady is higher,
taking mileage into consideration, than the rate from New
York to Utica, because you have competitive lines from New
York to Utica? A. The rate from Utica to Schenectady is not
higher than from Utica to New York.

Q. Per mile? A. Yes, it is higher per mile.

Q. Your local rates between points non- competitive, in which
your line is absolute master of the field, are considerably high-
er, are they not, per mile per nundred than the rate from New
York to those local points, or from those local points to New
York? A. Yes, I think they may be per mile.

Q. Of course, as you have not the written or printed sched-
ules, you can not tell exactly ; but, taking individual cases

205

where you make rates, they ave higher ? A. They may be
some higher for short distances.

Q. Then when you make a special rale to a man in Utica,
or a man \n Syracuse, and enablts him in that way to sell to a
large circuit along the line of your mad, your company gets
the benefit, doesn't it, of this iTicreased or larger local rate in
the shipments that are made from those points to the other
points ? A. Well, we make reasonable special rates.

Q. Have you got special rates also between Utica and Sche-
nectady, and Schenectady and Syracuse, and all those points ?
A. Yes ; we have.

Q. But is not everything special rate there ? A. No, sir :
not everything.

Q. You have no printed schedule and no written schedule;
it is all special rate, isn't it? A. We have got some tariffs
there that we live up to.

Q. Those are not the tariffs that I am speaking about ; I am
talking now about the tariff between these various local points,
that you have not furnished me ; and the reason you gave me
why you could not furnish nie those tariffs was, because there
were not any, and, therefore, each rate, you said, or each ship-
ment, stood on its own bottom? A. Yes, sir.

Q. How do you distinguish schedule rates from special rates
in those cases ? A. It again depends upon the quantity
shipped — upo'i the merits of the case.

Q. Upon the whole — I want your judgment as the general
freight agent of this line — the rates from these interior points,
say Syracuse or Amsterdam, to the other interior points lying
fifty miles to the east, and fifty miles to the west, are as a
whole higher, are they not, than the rate from New York to
these points ? A. They may be higher in proportion to the
distance.

Q. I don't like the form in which you put that answer
because you know I have called you as the first witness,
because I think you know ? A. I have not figured out the
distance ; I presume they are higher.

Q. Then when you give a special rate to a merchant in
Amsterdam or in Syracuse, by virtue of which he becomes a
distributor of goods to the east and west of him, in com-
petition with the New York merchant, the railway company
gets the benefit of that distribution by reason of the higher

206

local rates from Syracuse to the points east and to the points
west on such redistribution, doesn't it ? A.. Yes, sir.

Q. What points on your road is it that the New York, Lake
Erie & "Western Railway reaches ? A. Eoohester, Buffalo,
Suspension Br!do;e, Niagara Falls, Touawanda. Leroy, Attica,
and some others that I cannot now recall.

Q. In comparison to distance, are not your rates to those
points lower than to the other points on your road? A. They
are not at present.

Q. When were they so ? A. They may have been in former
times

Q. How long ago ? A, Within a month.

Q. And were not they so for fifteen years last passed ? A.
I don't think they were ; no, sir.

Q. During tho^e fifteen years was there any period of a
year in which the rates at those points where you compete
with the Erie — now called the New York, Lake Erie & West-
ern— were lower, mileage considered, than they were to the
other points on your line ? A. It may have been, but I can-
not remember now.

Q. If there have been, you disregarded the distance rate en-
tirely in those cases ; the question of competition was the
question which determined those freight charges ? (No an-
swer).

Q. You have testified that you charge ten cents a hundred
all around, on all classes of freight to certain shippers in Syra-
cuse, and certain other shippers in Dtica ; does it pay your
railway to carry at that rate ? A. It may pay us in certain
ways ; if the Chairman will allow me, I should like to make a
statement right here.

Mr. Sterne — I shall object to any statement being made by
you until the cross-examination is entered into ; I don't want
any ; you say it pays you ? A T should think it' does ; yes, sir

Q. To carry at that rate ? A. Yes, sir.

Q. When you give a rate, say of ten cents a hundred, to a
particular shipper or a particular consignee, and you do not to
another, what effect do you tliink that has upon the smaller
merchant in that particular town, who is compelled to pay, at
Syracuse say, 44, 37 and 33 cents a hundred, in these different
classes? A, I don't know as it will hurt them any, the differ-
ence is so slight.

207

Q. The diiference between ten cents, and forty-four, thirty-
seven, and thirty-three cents, is so slight you don't think it
would hurt them '? A. Yes ; that ten cents is sugar and
molasses.

Q. You say teu cents on all classes? A. Well, 95 per cent,
of them are heavy goods.

Q. Then, if it does not hurt the one man, how does it come
to benefit the other one to whom you give it? A. It is owing
to the quantity ; tlie other man, owing to the large quantity
shipped, may be enabled to obtain a lower rate from another
line.

Q. Then, you do it for ihe benefit of the other line, do you ?
A. We do it for the benefit of ourselves, to keep him from
going to the other line.

Q. Then, the theory upon which you act in such a case has
nothing to do with the benefit of that individual? A. We
don't care particularly to benefit him.

Q. Your object is to benefit your road ; that is the theory
upon which you act ; do yon know what is meant by under-
weighing goods ? A. I don't know what you refer to particu-
larly ; I do know what it is to undervveigh goods ; we have
cases every day where we charge for an excess — every hour in
the day ; we weigh all cars coming here.

Q. I mean as a systematic method of reducing freight
charges ? A. No, sir ; I do not.

Q. That you don't know ? A That I don't know.

Q. Your office is innocent of that practice? A. Perfectly so.

Q. Have you any special rates on breadstuffs — local special
rates ? A. I guess so.

Q. Any special local rates on provisions ? A. We inake a
special tariff every winter when tiiey ship dressed hogs.

Q. I don't speak of your special tariff ; I am speaking now
of special arrangements or agreements ? A. We may have ;
I don't remember any ju.st now.

Q. Do you know what is meant by cut rates ? A. A cut rate
is a reduced rate.

Q. Keduced to what, or below what ? A. That depends upon
circumstances.

Q. How does a cut rate' differ from a special rate — what is
the distinction ? A. It is substantially the same thing.

Q. Has not the effect practically been of your special rates

208

to build up certain individuals and increase their volume of
business year by year, and yet not increase the volume of the
business in that town ? A. Not at all, sir.

The hour of adjournment (3 P. M.) having arrived, Mr. Sterne
stated that he wish'id to make an application at this time that
when the Committee fidjouru to-morrow they adjourn to meet
Tuesday morning next, in.-.tead of Mondny, as he (Mr. Sterne)
had an important case in the Supreme Court, bei'ore Judge
Van Brunt, whicli was to commence on Monday, and he de-
sired to be present on that day, Judge Yan Brunt haviug re-
fused tr postpone the case.

Mr. GiiADY moved that when the Committee adjourn to-
morrow they adjourn to meet on Tuesday.

The motion was lost.

Adjourned to June 14th, 1879, 10 A. M.

New York, June 14, 1879, 10 a. m.

The Committee met pursuant to adjournment, and was
called to order by the Chairman.

Present : All the members of the Committee.

Samuel Goodman's examination resumed :

Bj- Mr. Sterne :

Q. Mr. Goodman, have you brought the books ? A. They
are here, yes sir.

Q. Produce them, please? (The books are produced).

Q. Is there an index to each volume ? A. Yes, sir.

Q. Where is that ? (The index to books Nos. 6, 6 and 7
produced.) A. The index to book No. 8 is not fully completed.

Q. Are there any books into which the items of the books
which you have brought are posted ? A. No, sir ; we have
only this index and this book.

Q. Have you no book or books which correspond to those

209

books as the ledger does to the journal ? A. No, sir ; we have
not.

Q. This index contains an index of the articles and an
index of the names ? A. Yes, sir.

Q. Also an index of the places ? A. No, sir, I tbink not.

Q. Then, unless you look through the items of those books)
you cannot tell mo how many special rates jougive to Syracuse
or Utica, or other places ? A. No, sir ; not definitely.

Q. Do you remember the names of the various firms — I am
now speaking of the leading ones — at the leading points along
the liue of the New York Central Eailioad, to whom you have
given and do give special rates ? A. I do ; some of them ; yes,
sir.

Q. So your mind will ser.ve as a sort of index for our purpo-
ses ? A. To a great extent ; to a certain extent ; here are the
books and they are also indexed.

Q. Not as to places ? A. No, sir.

Q. So unless I was as well informed as you are as to the
names of all the jobbing houses, for instance, in Syracuse and
Utica and Schenectady, I would not be able to tell from that
index as to whether any particular jobbing house or houses
therein mentioned are at one place or another '? A. Not par-
ticularly, unless you knew the names.

Q. Have j'ou anywhere in tabular form a statement which
gives the volume of shipments under these special rates V A
I have not, sir.

Q. Of that you keep no record? A. No, sir; we keep a
record of all the tonnage at separate points, but no separate
record of each sliipment or each shipper.

Q. Therefore you have no present means of ascertaining
what volume of shipment has gone to any shipper who has re-
ceived special rates ? A. Not to any certainty ; no, sii-.

Q. Or how they compare with each other ? A. No, sir.

Q. Do you know an organization connected with your rail-
way called the "Merchants Dispatch Company" ? A. There
is such an organization ; yes, sir.

Q. Does that organization carry any shipments to local
points ? A. None that I know of ; no, sir.

Q. All the shipments, therefore, to local points, are carried
on the New York Central Railroad by the New York Central
Eailroad ? A. Yes, sir.
15

210

Q. What, relation does your office bear to the express sys-
tem to local points ? A. None whatever.

Q. Is there not an express connected in some form or an-
other with your railway corporation which takes freight to lo-
cal points on the line of the New York Central? A. There is,

Q. What control over it or what relation to it has your
office ? A. None whatever.

Q. What is the name of the express company which thus
carries freight to local points? A. American Express Com-
pany, I believe that is the title.

Q. Do you handle its freight? A. I think not ; no, sir.

Q. Do they load their freight or its freiglit in your cars ? A.
I liave no positive knowledge as to that, sir.

Q. You don't know one way or another whether they use
your oAvn or their own cars? A. Not positively ; no, sir.

Q. How near do you know it ; what do you know about it?
A. Nothing to any certainty, but I believe cars have been built
for that special purpose.

Q. Built by whom ; by your company? A. By the company,
I believe.

Q. By your company for the Express company ? A. Yes,
sir.

Q. Do you fix rates for the Express company? A. I do not.

Q. Who has the fixing of the rates for the Express company?
A. I don't know positively ; I thiidi the General Manager.

Q. Do the Express company's cars run with your freight
trains? A. I don't know, sir.

Q. You don't know whether they do or not? A. No, sir;
1 have nothing to do with the running of the trains.

Q. Have you anything to do, or do you know anything about
the rates that the Express company charges to local points along
the lin^ of your road ? A. I do not, sir.

Q. Who has control over those rates ? A. I don't know sir.

Q. You have no means of ascertaining whether the Express
company's rates on any class of freights, or its special rates are
lower or higher than yours? A. I have not.

Q. What proportion of the whole of the freight business
done to and from local points in the State of New York, is done
by that Express company? A. I have no means of knowing,
sir ; I don't know anything about it.

Q. What proportion of the cars sent out .or returned to

21.1

New York, from and to local points within the State of New
York, are sent out and returned by the Express company ? A.
I don't know.

Q. When did the American Express Company first begin its
relations with the New York Central ? A. I could not tell you,
positively.

Q. Was it before or since your becoming connected with the
New York Central ? A. I think they have been running over
the road ever since my connection with the road.

Q. And you have never taken the trouble to inquire either
what rates they charge, or what proportion of business of
freight forwarding they do on the New York Central Eailway
Company compared with what the office does ? A. I have not,
sir ; it does not concern me at all, in any shape.

Q. What do you mean by the term "all rail contracts?"
A, The property is to go all by rail — all the way.

Q. Doesn't it^mean to use the railroad all the year round ?
A. No, sir.

Q. Do you give special contracts^in the case of single ship-
ments ? A. Sometimes.

Q. And then in such a case you give the contract without
regard to the regularity of the shipment, because you make no
provision as to any further shipments ? A. No, sir.

Q. And you make that contract then, also, without regard
to that other question which enters into your contracts of
building up that particular business? A. That may h:ive
something to do with it.

Q. In the case of a single shipment, you don't imagine, do
you, that you are building up the business by a single ship-
ment ? A. Sometimes.

Q. Do you think that sometimes by the making of a single
shipment, a business may. be built up by your railway com-
pany, whether at any future time or not any special contract
may be made by you or not, or whether at any future time you
may change the schedule rate or not ? A. In certain cases,
sir.

Q. Will you state any cases in which that may be true ?
A. Yes, sir ; I remember several cases.

Q. State a single case wherein by a single shipment of
goods you have built up business, and have thereafter not con-
tinued your special rates ? A. If I remember right, a gentle-

212

man came to me one clay and hacl a wagon -to ship, a wagon
for the purpose of peddling lager beer, I believe, and he wanted
to get it to Albanj^ or Troy, I forget which point ; he wanted
to build up the business, and wanted us to carry it at a special
rate ; we carried the wagon at a special rate ; it weighed three
or four hundred pounds ; if we had charged^the tariff it would
have cost more than the value of the wagon.

Q. He built up his business, did he ? A. I presume he did.

Q. You don't know anjthing about it ? A. No, sir.

Q. All you know is you gave him a chance to build up his
business by charging him a special rate .'' A. Yes, sir.

Q. Now, for instance, if that same person, knowing your
schedule rates, had not known he could make a special rate
with you by coming to you, that business would not have been
built up? A. Perhaps not.

Q. Then your schedule rate, in all the cases where people
don't know that they can make a special rate, has the tendency
to deter the building up business, hasn't it ? A. Not at all ;
this is an exeejitional case.

Q. All your special rates you claim to be exceptional cases?
A. So they are.

Q. You have told me, I believe, what proportion of the whole
local traffic of jour road is done by special rates, haven't you ?
A. Yes, sir ; at certain points ; Syracuse.

Q. What proportion, think you, of the local traffic of the
New York Central Railway, from New York to all the incor-
porated cities along the line of the New York Central Railway,
is done at special rsites, and what proportion, think you, is
done at schedule rates? A. It may be fifty per cent, at special
rates, and the balance to all points.

Q. Now, you are uot answering my question ; you say fifty
per cent, as to all points ? A. Yes, sir.

Q. I will confine my question to incorporated cities and such
places are generally places numbering more than 15,000 in-
habitants ; now, what proportion of the business done from
New York to such cities along the line of the Hudson River
& New York Central Railway, think you, is done by special
rates ? A. Do you wish to include all the cities?

Q. Only the cities ? A. I should say about fifty per cent, of
all business going into those cities is done by special rates.

Q. During what season of the year do you make those

Special contracts more frequently? A. Mcst generally in the
spring.

Q. And tliey last generally until the winter, do they not?
A. Some do until winter and some may last during the year.

Q. But as a general thing they end in the fall? A. It is not
the rule.

Q. Don't tliey genei ally end with the closing of navigation
on the canals? A. Not generally ; no, sir ; a great many do.

Q. What proportion, think you do ? A. I could not tell you
positively, sir.

Q. Those that make a contract, however, that they will ship
through your company all the year round, with them it lasts
all the year round? A. We have not made any contracts ;
merely special rates.

Q. You and I don't understand each other, when we talk
about contracts ; those for whom you fix special rates for the
year ? A. Yes, sir.

Q. On consideration of their agreeing that they will ship by
rail all the year ? A. Yes, sir.

Q. With them it lasts, of course, through the winter ? A.
Yes, sir.

Q. And the object, isn't it, of making the all year contract,
is to get an average rate for your corporation all the year, and
not to riin the risk of competition by the canal ? A. Yes, sir ;
Canal Lines, not the canal itself.

Q. Who fixes the tariff on milk ? A. I don't know.

Q Who imposes the tariff on milk ? A. I have given an
order on the Hudson River division.

Q. As to the tariff on milk ? A. Yes, sir.

Q. From whom did you get your order ? A. If I remember
correctly, my order came from the general traffic manager, Mr.
Rutter.

Q. Then you assume, don't you, that he fixes the tariff on
milk? A. I am not positive about it ; be might.

Q. It might be fixed by Mr. Vanderbilt ? A. Perhaps so.

Q. There is no intermediate authority, is there, between
Mr. Vanderbilt and Mr. Rutter as to traffic management ?
A. I am not aware of any, except the Vice-President.

Q. What order or direction did you give in relation to the
milk traffic, and tell me also in the same connection why is not

214

milk in any of tlifese classifications, or any of the way bills thai
you have produced ? A. Because it is a special business.

Q. That is your answer? A. Yes, sir.

Q. Is that the only reason ? A. Tlie only reason that I know
of.

Q. It is a regular business ? A. Yes, sir.

Q. It is a business that occupies the cars and attention of
the railway for 365 days in the year, doesn't it ? A. I believe so-

Q. Why do you call a business that is a regular business
for 365 days of the year a special business ? A. Because it is
handled different from any other business that we do ; it is car-
ried on separate trains.

Q. That is to say, there is so much of that business that it
occupies a whole train each day ? A. I am not prepared to
say that.

Q. Isn't it true ? A. It may be so.

Q. Do you know what the tariff on milk is ? A. I do at
present ; yes, sir.

Q. What has it been for the past few years ? A. At one
time it was six cents a gallon, and now it is four and one-half
cents.

Q. How much is that a hundred ? A. I could not tell you ;
I have not figured it up.

Q. How much does a can of milk weigh ? A. I think a hun-
dred pounds ; I am not sure of it ; it may weigh two hundred ;
I have not weighed any, and haven't the slightest means of
knowing.

Q. J)o you, or do you not, know whether a car laden with
milk is fully laden as to its capacity for carrying ? A. I could
not tell you positively.

Q. What is your impression about that ? A. I don't think
they are all loaded fully.

Q. Are they not as fully laden, compared with the capacity
to carry, as the average load ? A. I think not, sir.

Q. Don't a car full of milk cans, filled with milk, weigh at
least eight tons ? A. I think not, sir : because you cannot
load the cans on top of each other.

Q. No ; I mean standing level on the floor of the car ? A. I
think not.

Q. How many cars are there in a milk train ? A. I could

215

not tell you ; I have not given the matter any attention ; there
is but very little carried on the Hudson lliver Eoad.

Q- Do you know how much is carried on the Hudson River
Eoad ? A. I cannot say positively ; there may be two or three
cars a day.

Q. There may be more than two or three ; y6u are not quite
sure about that? A. No ; there may be three or four.

Q. Is your carriage of that commodity as large as the Har-
lem ? A. It is not.

Q. Do you charge the same figure as they ? A. The same
price.

Q. The same figure as the Erie does ? A. I don't know
what the Erie charges.

Q. Within what radius does the milk come ? A. I should
say *200 miles.

Q. Do you not get any milk further than 200 miles? A. I
think not ; it may be 210 miles.

Q. Is your charge for milk carried twenty miles the seme
as the milk carried 200 miles ? A. No, sir ; we charge a
higher rate for the greater distance — that is for 200 miles.

Q. Do you charge a greater rate for fifty miles than for ten
miles ? A. We do not.

Q. Wliere does your variation then begin ; at what point
ou that milk traflic ? A. There has been a new traffic started
west of Albany on which we charge six cents a gallon.

Q. Then you charge six instead of four and a half? A.
Xes, sir.

Q. When you charged six cents on the trafiic here you
charged it on that principle, or you had not that traffic then ?
A. No, sir.

Q. Then your charge is uniform on all milk carried between
Albany and New York? A. Yes, sir.

Q. Therefore the tariff on milk has no relation to the dis-
tance carried ? A. Not particularly.

Q. Has it any if the price is the same between New York
and Albany? A. I don't know of any milk being shipped
from a distance greater than sixty miles.

Q. That is not consistent with what you have just stated ?
A. Except west of Albany.

Q. Then all your milk comes from sixty miles north of New

210

York and some distance west of Albniiy ? A. Yes, sir ; as far
us I know at present.

Q,. And npon the wliole distantui between Albany and New
York you make no distinction between carrying can per can ?
A. No, sir.

Q. Now, six cents amounts to how much a can? A. It is
four and a half cents a i^allou. .^

Q. How much does that amount to a can '? A. Forty-five
cents.

Q. Forty-five cents each can ? A. Yes, sir.

By the Chairman :

Q. Tlic cans are all of uniform size? A. Yes, sir; they are
all supposed to contain ten gallons.

B}' Mr. Steiine :

Q. The milk is not collected by the employees of the com-
pany '? A. How do you nu-an '?

Q In other words, the fanners bring the milk to the <lepot j
and help the employees in putting the cans into llu^ cars? A.
I have no positive information on that subject.

Q. Have you any information upon the subject of handling
these cans when tbey arrive here? A. I liave not.

Q. Yoir don't know anything alxiut that ? A. No, sir.

(,^. You have told us that jou did not know precisely how
mucli it costs to handle at the tei'uiinu-^, and how much it costs
to haul per ton, per mile ; now, on what do you base your
guess that you gave that it cost about three cents a liunJred
to handle the traffic at the two termini ? A. The number of
men we employ.

Q. Is not the handling of the traftic contracted for, or (U)U-
tract(Hl out on the New York & Hudson lliv(>,r lload ? A.
Not that I am aware of.

Q. There is not any organization or com))auy that makes

contracts ? A. For handling frc^ight ?

Q. Yes, sir ? A. None that I know of.

(^. If there was such a thijig you would know it? A. I
might know it and might not, biit I don't think there is.

Q. You would think it all right to make si)ecial rates as to
])assenger traffic as well as to freight ? I have nothing to do
with passenger traffic.

217

Q. You have been twenty-two years in a railroad office 5
you are an expert ou railway matters ; you have given your
opinion that a railway could not very well be managed without
giving spt'cial rates ; that it was necessary ; now tell us why
that same reason does not apply to passenger traffic ? A. I
could not tell you ; I don't know.

(Objected to on the ground that the witness is not an expert,
and his opinion has nothing to do with the subject of the in-
vestigation; question withdrawn.)

Q. Have you a tariff of rates to Canadian points ? A.
Local tariff ? I don't know of any.

Q. Call it anything you please. (Qjiestion repeated.) A. I
have not myself ; I haven't anything to do with it ; not the
through traffic.

Q. You consider Prescott through traffic, and Ogdensburgh
local traffic ? A- We have no traffic to Prescott.

Q. What is 3'our rate to Ogdensburgh? A. I don't remember
just now ; there is a rate given me by the General Freight Agent
of the Eome ct Walertown Eoad, to which I have added ours,
maldnj:; a through rate, I think, of 65 cents.

Q. Now, I want to ask you the general question, whether
you do or do not know, are not the rates given to merchants in
Prescott, a point opposite Ogdensburgh, ou the St. Lrwrence
river, lower by your railway than the rates charged to mer-
chants in Ogdensburgh ? A. I have no knowledge to that
effect, sir.

Q. Have you any means of ascertaining that fact ? A. Not
at jiresent ; I have not.

Q. Don't you bill to Prescott ? A. No, sir.

Q. Your road does not? A. No, sir.

Q. Therefore a merchant from Prescott purchasing goods in
New York cannot a-certain at what rate his goods will be
shipped to Prescott ? A. I think not.

Q. Are thero any points on the St. Lawrence river in Can-
ada to which you bill or ship ? A. We ship to a great many
but I don't tliiuk we bill to any.

Q. Perhaps we don't understimd each other on the word
" bill ;" are there any points to which you fix rates, or to
which you give rates to shippers on the St. Lawrence river in
Canada ? A. I cannot recall any now, unless it is Kingston ;
may have been rates given to Kingston,

218

Q. Do you also to Clifton ? A. I don't remember ; I would
not give rates to Clifton.

Q. How do the rates you give to Canada points compare as
to price with the rates you give to New York points on the
St. Lawrence river ; are they higher or lower ? A. I should
say they would be about the same, as far as I know at the
present time.

Q. Are they not lower, as matter of fact, in consequence of
the competition you have already claimed to have from Cana-
dian railways ? A. They may be.

Q. Who in your office would know what these rates are ; I
mean in the office of the New York Central & Hudson River
Railroad? A. I don't know of anybody just now ; I don't
know as there are any rates in existence except a special tariff,
perhaps, which you will find in this book.

Q. Then you do fix special tariff rates to points on the St.
Lawrence in Canada? A. Not to Canada; no, sir.

Q. And you have never made a special rate to Canada ? A.
None that I recollect now, sir ; none on tlie St. Lawrence river
that I can recollect at this time.

Q. You make the limitations on St. Lawrence river ; are
there any points in Canada to which you give special rates ?
A. There are rates given to a number of other points in Canada ;
but they are through points.

Q. Have you anything to do with that? A. No, sir ;. I have
not.

Q. Your jurisdiction stops Avith the line of the State ? A.
Yes, sir.

Q. These printed schedules that you have brought here,
are they posted at the various freight dejiots and passenger
depots along the line of your railroad? A. I don't think they
are, sir.

Q. Therefore, to discover even the schedule rate, some per-
sonal information must be directed to somebody in charge?
A. Yes, sir.

Q. Do you take pains to distribute these schedules ? A.
Only to our agents.

Q. You don't distribute them among merchants? A, No,
sir ; not unless they ask for them.

Q. You have stated that Mr. Rutter determines, finally,
these rates ; now, are you prepared to say in each particular

219

instance Avlien ca claim is made for a special rate or an appli-
cation is made for a special rate, that yoii submit the question
to Mr. llutter, stating the circumstances, the amount of the
shipiueut, and the rate that is asked for, and that he deter-
mines V A. Not ill all cases, sir ; I obtain my general instruc-
tious I'lom him, or from the general freight agent.

Q. Now, what cases are there, and what are the [)eculiar-
ities of those cases which are submitted to Mr. Rutter, and to
which yoii don't think your discretion applies under your gen-
eral orders '? A. I consult with him as to the general policy
of making those rates.

Q. Then the individual instances don't come under his
notice ? A. Not generally.

Q. Can you tell this Committee a little more in detail as to
when tliey do— if you have any rale about it — come under
his notice and when they do not? A. Any time Mr. Piutter
desires inf'^imation on the subject he can get it — he asks for
it; he is a very busy gen'deman, and has his hands full all th-e
time ; it is impossible for him to run it.

Q. Then you neYer ^volunteer any information, and you
make your rates under these general instructions from him ?
A. Oh yes ; I volunteer a great deal.

(Last Question but one read to witness).

Q. Is your answer to my last question the only answer you
can make to that question that has just been read to you?
A. 1 cannot recall any particular facts at this time.

Q. In making up a freight train, what proportion of the
freiglit train is it that goes out full, and what proportion
empty, to the local points in the State of New York ? A.
From here ?

Q. Yes, sir ? A. I could not tell you positively : I have not
given the matter any thought or study.

Q. In makin;^ up a freight train, can you tell us what pro-
portion of the cars go filled under special rates, and what pro-
portion of the cars go filled under the schedule rates ? A. I
could not tell you.

Q. You cannot even approximately tell that? A. No, sir ;
I should not want to.

Q. In making up a freight train, can you tell us what pro-
portion of the train goes out to one consignee— what proper-

220

tion to many consignees ? A. I could not tell very ■well ; no,
sir.

Q. Can you tell us as to any points along the line of your
road ; and if so, to which ? A. Take Syracuse, if you please ;
we carry many loaded cars ; I should say three ears out of
eyery five go to one consignee ; that is full ears.

Q. As to Syracuse ; three cars out of iive that you send to
Syracuse, go to one consignee? A. There is one car to each
consignee ; loaded cars ; about three cars out of every five go
to one consignee.

Q. Then there are three consignees ? A. Tes, sir.

Q. Who take three-filths of the stuff you ship from New
York to Syracuse ; is that it "? A. Yes, sir ; if you take fiye
cars for example.

Q. Then there are three consignees v.ho take three-fifths of
all you ship, isn't it, if you take fiye cars for example ; if you
take ten cars as an example, they till six ears ? A. I should
say so ; yes, sir.

Q. If twenty cars, they would take twelye out of the twenty ?
A. Yes, sir.

Q. And no matter how manj" cars they take, the proportion
— three-fifths of the amount remains the same ? A. Yes, sir ;
I could not teU you positiyely about that, but that is my im-
pression.

Q. And those three consignees are the consignees that have
special rates ? A. That is not the ease ; that is not the ques-
tion, sir ; that is not my answer ; if there were twenty cars
shipped, twelve cars go to tweiye consignees ; if fiye cars are
shipped, three might go to three consignees.

Q. I want to have you correct ; I don't want to mislead
you or to be misled by your answer ; am I to understand,
then, that three-fifths of the shipments made by you to S^ racuse
go to consignees who ship by car loads ? A. Yes, sir.

Q. That is it? A. Yes, sir.

Q. Now, haye all those consignees special rates ? A. I think
they have.

Q. And have none of the consignees whose goods go in the
other cars special rates ? A. Yes, sir.

Q. Many of them have ? A. Yes, sir.

Q. So the special rate does not depend upon the car load ?
A. Not the rate itself.

221

Q. What is the course of your oiBce in relation to shipments
to particular points, if you have not a car luiul ; do you ship
those goods forward, or do you wait until there has a car load
accumulated before you make you: shipments? A. Slip it
every day, sir ; we do not Avait for a full car load ; if there is :i
single package to any particular point, the car goes with that.

Q. You have a great many cars go empty or with a single
package ? A. We have Sume ; yes, sir.

Q. You have already testified that one-third of then; \vi nt
enjptyback? A. Yes, sir.

Q. Now, if you kindly take those books in hand — oh. cm
you tell me, by-the-by — you probably cau - in what respect
does this classification differ from the classification of the west-
ward bound pool ? A. I don't think it differs very mateiially

Q. You don't think your westward bound classification dif-
fers very materially from the pool? A. I do not.

Q. You know what I mean by the " pool " — tlie low tiafBc
arrangements between the various railway combinations? A.
Yes, sir.

Q. You stated yesterday that your special rates you think,
increases the business of the railway ? A. I do.

Q. If you reduce your schedule rate to the lowest special
rate, wouldn't it still more increase the business of your rail-
way? A. I don't think it would.

Q. If not, why not ; take the individual case ; if the S])ecial
rate to Mr. Grouse at Syracuse increases, according to your
opinion, the business of your railway to Syracuse, why wouldn't
reducing your schedule rates to that special rate generally to
Syracuse increase the business of your railway still more? A.
Because our present special rate secures all the business there
is in the town.

Q. Then, the special rate is not made to develop the busi-
ness, but to secure the business ? A. Also to develop it.

Q. But you don't think making the special rate to other
people as low as to Mr. Grouse in Sj'racuse would develop
the business with other people as much as it does ? A. Per-
haps they haven't the capital to develop the business.

Q. They might find it somewhere? A. II they can show
that they can do the business, they can always get the rate.

Q. You wait until they get the business before you give
them the rate, don't you ? A. Don't always.

222

Q. Have you eomparecl tlie growth of your local traffic from
year to year wit i eaeli other? A. I have not, recently.

Q. Do you know whether or uot th.^ local traffic betweeu
the various points on your railway has increased or decreased
in receut years? A. Has increased enormoiisly.

Q. Have you noticed whether or uot your local traffic be-
tween the various points ou your line — not through points —
has increased or decreased ? A. I think it has increased also.

Q. For instance, Utica to Syraciise, Syracuse to Utica, Sche-
nectady to Utica, etc. ; you believe the traffic between those
various points lias increased larg.dy in recent years ? A. Yes,
sir.

Q. And has that increase been steady? A. I believe it is,
from year to year.

Q. Have you any data in your office by which you can de-
termine that ? A. I have not.

Q. Have you never furnished, for the purpose of making
returns to the State Engineer, any data as to the extent and
volume and value of your local traffic ? A. I do not make the
returns ; 1 do not know anything about it.

Q. Have you furnished to the office that makes the returns
any data ? A. No, sir.

Q. Have you been called upon for any such data ? A. I
have not.

Q. If you had been called upon for any such data, could you
have furnished it ? A. I don't think I could, without the
means of knowing it.

Q. Have you the means of knowing it ? A. No, sir.

Q. Will you give the special rates to local points ; to Mr.
MeCarty of Utica ? A. I do not know of any such man at
Utica.

Q. Syracuse ? A. Yes, sir.

Q. Does he get a special rate ? A. Yes, sir.

Mr. Depew, at this point, renewed his objection to the dis-
closure of the names contained in the books. Alter discussion,
participated in by Messrs. Loomis, Shipman, Sterne and De-
pew, it was decided, on motion of Mr. Duguid, that a sub-com-
mittee of three be appointed by the Chairman, and that they,
in connection with an expert, examine the books and develop
whatever may be necessary that the committee may desire,

223

with vefeieiico to this qurstion. The Chaiimnn appcnnled as
yiu'h couiiuittt'e Messrs. Duguid, Ttiiy and \\'adsworth. The
exaiuiuation theu coutiiiued.

By Mr. Baker :

Q. In fixino- sjieeial rates to certain wholesale dealers in
Syraiarse, Rochester, or other cities in the State, do you de-
termine the amount with reference to the fact tliat the com-
pany is likely to receive local or other additional rates from
the customers of the wholesalers in retransportiug such goods?
A. We always do.

By Mr. Sterne :

Q. Is one of yonr methods in giving special rates putting
goods that belonged to one class into another ? A. Some-
times ; yes, sir.

Q. So, in addition to naming special rates you change
your classification for the purpose of getting a changed condi-
tion of affairs as to filial results? A. '\^'e do it at times.

Q. What proportion does that changed clabsification bear to
the change of rates '? A. That I could not tell you ; it is not
done veiy often.

Q. Paper belongs to what class ? A. Second class.

Q. And in many instances you charge it as third or fourth
class? A. Yes, sir ; a great many.

Q. So, your classification is no more of a guide, as to the
rate at which goods are shipped, than the price ? A. Not
always.

Q. And your deviations from this classification are as numer-
ous, are they not, as your deviations from the rates? A. I
think not.

Q. What proportion do they bear ? A. I could not tell
you ; it is not done very often ; only in isolated cases.

Q. Don't you ship paper as fourth class frequently? A.
Sometimes ; yes, sir ; straw paper.

Q. No other kind ? A. Sometimes printing paper.

Q. And sometimes writing paper ? A. No, sir.

Q. Not if you know it? A. No, sir.

Q. Ton say your deviations from this class of oases are as
numerous, are they not, as your deviations from the rates ?
A. I think not.

224

Q. I fiod on this book, page 225, Vol. 8, a contract with
Adriance, Piatt & Co. ? A. Yes, sir.

Q. In which you agree to charge for all classes per hundred
pnunds fifteen cents per hundred, seventeen cents a hundred,
twenty cents a hundred ; and no rate more than twenty cents
a Imndred to pretty much all leading points on your railway;
hdW large a .variation in percentage is thai from your schedule
) ates V A. I could not tell you at this^time.

Q. Isn't it considerably less than one-half your schedule
rates? A. I do not think it is, sir.

Q. Your schedule rate on first class to Rome is what ? A.
Thirty-five cents, I guess.

Q. And your schedule rate on second class to Rome is
what? A. Twenty-eight.

Q. And your schedule rate to Rome on third class is what ?

A. Twenty-four.

Q. And you agree with those gentlemen to give them a rate
of eleven on all classes to Rome ? A. Yes, sir.

Q. Is'nt that considerable less than one-half of your
schedule rates ? A. I don't think it is, sir.

Q. Is there anything in this agreement to show that they
ship mowing machines by carloads? A. That is what it is;
they don't make anything else ; they don't ship anything else.

Q. Is there any agreement here with Adriance, Piatt & Co.,
that they are to ship mowing machines in car loads ? A. Not
particularly.

Q. And mowing machines, according to your schedule, is
not fourth class ? A. No class at all for agricultural imple-
ments.

Q. You say you have no class for agricultural implements?
A. No, except by special contract.

Q. So all agricultural implements shipped in this State are
shipped by special contract ? A. I believe they all are.

Q. All this machinery unboxed is shipped as first class
freight, and machinery boxed as second class, and you have
no contract with them by which they agree to ship by car
load ? A. No, sir ; no special agreement as to the quantity to
be shipped at one time.

Q. Where do Adriance, Piatt & Co., ship from ? A. Pough-
keepsie, sir.

■425

Q. "What is your rate to Mr. McCarthy ? A. I believe it is
twenty cents a hundred.

Q. He ships first class, doesn't he, mainly? A. Yts, sir.

Q. Almost exclusively ? A. Yes, sir ; Syiacuse.

Q. How does that iliffer from the schedule rate ? A. I don't
know ; you have the tariff there.

Q. Which firm of McCarthy is that, is that Senator Mc-
Carthy's firm ? A. Yes, sir.

Q. Wljat is the name of that firm ? A. D. McCarthy, Son &
Co.

Q. First class rates to Syracuse aie thirty-seven cents a hun-
dred, it is about fifty per cent, less to hiru ; do you laiow how
much you ship to him in the course of a year V A. I do not.

Q. I see you have here a special rate to Field, Lester & Co.
that means Field, Leiter & Co., doesu't it ? A. Yes, sir.

A. That is a house in Chicago ? A. Yes, sir.

Q. From Stuyvesant to Chicago at special rate of seventy-
five cents a hundred pounds ; didu't you testify you made no
special rates outside the State of New York? A. Not as a rule
I don't ; these rates are made by consent of western roads.

Q. Then there are numerous cases spread through these
books in which special rates are named to parties outside of
this State by the consent of western roads ? A. Yes, sir.

Q. How is that consent obtained? A. By telegram or by
letter; sometimes verbally.

Q. How do you verbally get a consent from a western road ?
A. Representatives of the roads are often here in this City.

Q. That rate to Mr. McCarthy of twenty cents a hundred
was made when ? A. Sometime last January.

Q. That was when the o!d rate was in force, wasn't it ? A.
Yes, sir.

Q. And the rate then was on first class, forty-seven cents a
hundred ? A. I am not sure about it ; you have got it there.

Q. Is that it (handing paper to witness) ? A. Yes, sir.

Q. Forty-seven cents a hundred ? A. Yes, sir.

Q. Therefore Mr. McCarthy's rate was about sixty per cent,
less than the rate to other shippers ? Perhaps so ; yes, sir.

Q. Now, is there any other house in Syracuse — dry goods
house — that ships first class freight mainly, to whom you have
a rate of twenty cents on first class ? A. I believe there is
17

2-26

another house there but T cannot recall the names of the
houses.

Q. Isn't it McCarthy's other house ? A. He has only one
house.

Q. The aie two McCarthy's there in Syracuse ? A. One is
hardware business ; the other is dry goods.

Q. There is a D. McCarty & Co. and D. McCarthy, Sons &
Co. ; is that the same firm ? A. That is the same firm.

Q. And then there is a McCarthy <fe Eedfield ? A. Yes,
sir.

Q. Have they got a special rate ? A. I believe so ; yes, sir.

Q. What is that special rate ? A. I cannoo recall it just
now.

Q. That would be fourth class special rate ? A. Principally.

Q. Would that be about 60 per cent, below the schedule rate
too ? A. It may be.

Q. Now, how many ^instances are there, do you think, in
which you have named special rates to parties outside of this
State ; I mean for shipments outside ? A. I have not named
any.

Q. Field, Leiter & Co. get their stoves shipped from Stuyves-
ant to Chicago at seventy-five cents a hundred pounds ? A. I
don't know about their shipping stoves, that must be a mis-
take ; it is a dry goods house.

Q. What is the meaning then on page 306 of Field, Leiter
& Co.'s shipments "to Chicago ? A. It is a mistake in the
names ; it should be something else ; I believe it is dry goods.

Q. Now, upon the very same page there is an entry " steel
rails, Syracuse to Detroit, $1.87-g per ton. ?" A. Tes, sir.

Q. New York Central, .87^ ; that means, I suppose, that
the special rate is 871 cents to Buffalo ? A. Yes, sir.

Q. And from Buffalo to Detroit a dollar ? A. Yes, sir.

Q. Who named that rate ? A, I presume I named it.

Q. Then how did you come to tell this committee that your
jurisdiction as to naming rales stopped with the limits and
boundaries of this State ? A. it does ; all rates I make be-
yond, I obtain by special consent; I ask for rates from other
parties and add them to mine.

Q. You consider yourself authorized to act in that way with
jobbers who ship with you to get special rates from other
railroads ? A. Do anything to accomodate them.

227

Q. And you do get in that way, special rates from other
railways? A. Yes, sir.

Q. And if they did not come to you for that pmpose, they
would have to pay your schedule rates, and their schedule
rates ? A. I am not sure about that.

Q. I asked you the question in one part of your examina-
tion, whether, if a man who shipped through you on schedule
rates should come to you to make reclamation, on the ground
that you would have given him special rates if he had asked
for any, and you say you "would not have given him any then ?

A. I would not now if I knew it.

Q. Then, in the absence of any arrangement, would not he
have to pay schedule rates, or is there some one beside yourself
who might make special rates ? A. Somebody may have asked
for them and got them at Buffalo.

Q. Assuming he did not do that, he would have to pay you
your schedule rates ? A. Yes, sir.

Q. Now, I find an enti y on page 344, of the same book, G.

B. Sawyer & Co., lumber, from Tonawanda to Boston, and from
Buffalo to Boston, from Erie to Boston, from Black Rock to
Boston, and from Suspension Bridge to Boston, $35 a car of
teutons; who named that rate ? A. I believe I did.

Q. Then both eastward and westward, beyond the bound-
aries of thisState, you named special rates almost asfrequently
it seems to me, according to this book, as you named special
rates within the boundaries? A. None from Erie, I think; I
should not make the rate from Erie ; from East Buffalo.

Q. Boston is out of the boundaries of this State, isn't it ?
A. I guess so.

Q. And you named that rate ? A. Oh, yes.

Q. Did you name that in consultation with anybody ? A. I
think I did ; with the Boston & Albany Eoad.

Q. Doesn't it frequently happen these other roads recognize
your authority to make special rates on their roads ? A. They
do, sometimes.

Q. How often does that happen ? A. I could not tell ; I
don't know.

Q. Do these books contain a record of east-bound as well as
west-bound? A. Yes, sir; all the contracts within the year.

Q. On page 337, the Western Transportation Company gets
a special rate on goods shipped from Troy to Milwaukee, Troy

228

to Chicago, Troy to Cleveland, and Troy to Detroit, ten cents
per hundred pounds. A. Yes, sir.

Q. You don't carry on schedule rates, do you, from Troy to
Syracuse at ten cents a hundred ? A. We have special rates
at a less price than that.

Q. Do you on schedule rates carry fourth class from Troy to
Syracuse at ten cents a hundred ? A. I believe not.

Q. Then the person who received this shipment from Troy
at Milwaukee at ten cents a hundred received a lower rate, did
he not, than your schedule rate from Troy to Syracuse ? A.
In this case he might ; yes, sir.

Q. And the same is true as to Chicago, Cleveland and De-
troit ? A. It may be.

Q. Isn't it so ? A. I don't know ; if it says so it is so.

Q. This says so ; that is on page 337 ; entry G735, volume 8 ;
on page 338 I find an entry of wool, Victor to Boston, sixty
cents per hundred pounds, New York Central fifty-three cents ;
now, that is a special rate, is it, on wool to Boston ? A. Yes,
sir.

Q. Now, what motive had you, for instance, in making that
particular trunsaction ? A. I presume it was all that the wool
would bring — all that we could get out of it to transport it.

Q. It was all it could bear at the time ? A. Yes, sir.

Q. Had you any interest in building Mr. Stafi'ord's business
up ? A. Not the slightest ; did not know him.

Q. Did not know who he was ? A. Did not know him at all.

Q. On page 298 I find an entry of Home to Boston, wrap-
ping paper carried for Hnlsted & Parry for seventeen and a
half cents per hundred pounds ? A. Yes, sir.

Q. How much of a haul is it from Rome to where the New
York Central Railway censes ? A. 110 miles.

Q. And the Boston and Albany begins ? A. Yes, sir.

Q. According to this book you received forty-three per cent,
of that freight ? A. Yes, sir.

Q. Therefore you received something less than eight cents
per hundred to haul it, how much ? A. 110 miles.

A. Did it pay the New York Central Railway Company to
make that haul ? A. I am not prepared to say ; I don't know.

Q. Are you prepared to make contracts at a loss to the New
York Central Railway Company ? A. Not if I know it ; not if
I can help it.

229

Q. Then when you made that contract you acted under the
impression that the New York Central Kailway would make a
profit on that ? A. I don't know about that.

Q. You pay no attention at all to the profits made by your
company, or whether they make or lose on your contracts ? A.
I do in some cases ; I do in most cases.

Q. Is this one of the cases in which you did or did not ? A.
I am not prepared to say.

Q. On the following page I find a contract entered into with
" W. L. Co. ;" no " W. T. Co."— Western Transportation Com-
pany— you understand the handwriting ; billiard beds ; entries
No. 6,432, Schenectady to Chicago, twenty cents per hundred
pounds ; New York Central, one-half ; that means, does it not,
that the New York Central carried these billiard beds at ten
cents per hundred pounds from Sechenectady to Buffalo ? A.
Yea, sir.

Q. Are you prepared to say whether the New York Central
made a profit or lost on that transaction ? A. I am not pre-
pared to say.

Q. You made that contract then without the slightest regard
whether the company could afford to do it or not ? A. I could
not say positively.

Q. Tell me when is it you pay attention to the question
whether the company can afi'ord to make the haul, and when is
it you do not ? A. I liave some regard to it at all times, but
cannot always get it.

Q. How much loss, if any to the company, did the company
make in that case ? A. I could not tell you ; I don't know as
they made any loss on it.

Q. Then how can you know, if you say you paid some re-
gard to that, whether the company makes any loss or not, if
you cannot now tell me whether the company made any loss
on that ? A. We may have had a car at Schenectady that was
unloaded and taken these billiard beds for the purpose of car-
rying them on to Buffalo.

Q. Do you, before you name such contracts as this, discover
whether they have cars there ? A. W e can most generally get
westward bound cars at Schenectady.

Q. Then you assume there would be cars there ? A. There
generally are.

Q. Then you think the company can afford to carry westward

230

bound freights for anything that will keep its car wheels
greased ? A. I am not prepared to say that at all.

Q. I find au entry, 6,434, on same page, " E. C. Billings, H. H.
goods," what is that ? A. Household goods ; furniture.

Q. What class do they belong to ? A. First class.

Q. They are very bulky and very light weight ? A. Tes,
sir.

Q. Oleola to Kansas City ; Kansas City is beyond this State
isn't it '? A. Tes, sir.

Q. How far is it '? A. Seven or eight hundred miles.

Q. You mean seventeen or eighteen hundred miles ? A. Xo,
sir; from Buffalo to Kansas City?

Q. Xo ; fiom Oleola ? A.I don't know any such place.

Q. Oneida, excuse me; how far is it to Kansas City? A
Eleven hundred miles, perhaps.

Q. How many miles from Buffalo to St. Louis ? A. Eight
hundred miles.

Q. How far fiom St. Louis to Kansas City ? A. Two
hundred, I think.

Q. It is more than six hundred miles ? A. From St. Louis
to Kansas City ?

Q. Yes, sir ? A. I woidd hke to bet you on it.

Q. You will bet on my information, won't you? A. I will
bet it is not six hundred miles.

Q. Will you bet it is not four hundred ? A. Yes, sir ; I will
bet you the segars.

Q. From Oneida to Kansas City according to your impres-
sion, it is about 1300 miles ? A. Yes, sir-.

Q. Xow, you carried that at a dollar per himdred pounds? A.
Yes, sir,

Q. The Xew York Central receiving twenty-three cents per
hundred? A. Yes, sir.

Q. You carried it for Mr. E. C. BiUings ; do you know any-
thing about Mr. Bdlings ? A. Do not know him at all.

Q. Know anything about his business ? A No ; he hasn't
any business ; he went out to Kansas to buy a farm, I sup-
pose.

Q. Theiefore it was not to build up his business in Oneida
that you charged that special rate there ? A. Xo ; because
his furniture was not worth anything ; it was all he could pay.

'^31

Q. You remember the transaction, do you ? A. I think I
do.

Q. Had he a great deal of furniture ? A. He must have
had a car load ; I presume he did.

Q. New York Central, twenty-three cents ; what is the
scliedule rate from Oneida to Buffalo? A. About forty cents.

Q. For first class ? A. Yes, sir.

Q. And how did you fix a rate for him with the other rail-
wa}' companies? A. I believe I obtained the rate from a
western road.

Q. By telegraphing? A. Yes, sir.

Q. All the western roads? A. ISo ; only one ; they can make
it from Buffalo right through to Kansas City or any point.

Q. Now, there is a shipper who ships cement ; you don't give
his name ; why is that; entry No. 6485? A. Allow me to
look at it.

Q. Yes, sir ? A. It is for all shippers ; it is to anybody that
has a mind to ship cement.

Q. Albany to Chicago and Milwaukee you take cement
for all shippers at forty cents a barrel? A. We did in this
case.

Q. You say for all shippers and then you say you did in this
case ? A. We offer the rate to anyl>ody that has a mind to
ship at a particular time.

Q. WTiy did you make the rates only to these two particular
western points ? A. That is all I was asked ; some one
asked the rate from Albany to Milwaukee or Chicago on
cement, which is property worth a dollar a barrel.

Q. You put it at forty cents on what ground ? A. On the
ground it is not worth anything ; a higher price would not take
it ; could not afford to ship it.

Q. The principle that governed you in that was the value of
the thing ? A. Yes, sir ; if we carried it at all we would have
to carry it at a low rate.

Q. If that barrel of cement had, for any reason in the world,
in a few weeks increa-ed iu value two or three hundred per
cent., your rate would havo gone up two or three hundred per
cent. ? A. It might havo I'.one so ; advancing our rates on the
price of the cement.

Q. Although no difference in the classification ? A. Yes,
sir.

232

Q. That is anotHer principle that governs it ? A. There is
no principle to this ; I am merely answering a question you
put to me now.

Q. Have you any idea how many tons of furniture go in one
car ? Seven tons.

Q. I see a rate named here to the T. & B. R. R. ; what is
the meaning of that ? A. Troy & Boston Railroad.

Q. Which you agree to carry for the Troy & Boston Rail-
road carriages, in box cars ; what kind of carriages does that
road need ; carriages coming over the Troy & Boston Road
to Troy and down by your road to Utioa and Syracuse and
Chittenango, $50 a car, New York Central, forty-five per cent ?
A. Yes, sir.

Q. Is that a special rate named by the Boston Railroad with
yone consent ? Q. Yes, sir.

Q. So, in addition to the special rates to which you have al-
ready testified, there are special rates fixed for you by the rail-
ways in other States telegraphed to you for your acceptance
and they find their way into the book here in the manner in-
dicated by entry 5,249 ? A. Yes, sir.

Q. Now, heie is an entry as to which I would like an ex-
planation ; entry No. 7,034 ; it is found on page 377 of this book.
Vol. 8 of 001) tracts, gives a rate from Utica to Philadelphia
via Weedsport, of twenty-five cents per hundred pounds
on rags for Messrs. Hubbell & Baxter, and to all other stations
ou your line at fourth class rates ; rags are particularly bulky,
, ar6 they not ? A. They are not so now that they are pressed
pretty close.

Q. Were those pressed or bulky '? A. Pressed.

Q. What classification do rags belong to? A. I believe
fourth class, pressed in bales.

Q. Were these pressed in bales ? A. Yes, sir ; rags pressed
in bales ; we don't ship any other way.

Q. Rags in sacks, second class ; and you have no means of
ascertaining from this entry whether pressed in bales or sacks?
A. We take it for granted that they were pressed in bales, as
we send them in no other way.

Q. You had made no agreement by which they were to send
in bales ? A. No, sir.

Q. Therefore, by the nature of- this contract they could send

233

them loose, in bags or in bales as they saw fit ? A. They could
not send them loose, we would not have received them.

Q. In bags ? A. They might have shipped in bags, but
it was uudevstood, though nothing was said about it.

Q. These rags go from Utica at twenty-five cents per hundred
pounds ? A. Yes, sir.

Q. New York Central Road gets twenty-five per cent, of
that ? A. Yes, sir.

Q You therefore get six and a quarter cents per hundred
pounds to haul from Utica to a point where you strike the
road that goes to Philadelphia, which is at Weedsport ? A.
Yes, sir.

Q. That is how many miles from Utica ? A. About sixty.

Q. And you carry for six and a quarter cents a hundred
pounds of these rags ? A. Yes, sir.

Q. How much is that below your schedule rate ? A. About
one-half.

Q. Do you know Messrs. Hubbell & Baxter ? A. Do not.

Q. Do you know anything about their business? A. I know
they do quite a large business.

Q. How do you know that ; what information do you have ?
A. Through our agent.

Q. Then before you make a special rate, you make an in-
quiry as to who Messrs. Hubbell & Baxter are ? A. Some-
times.

Q. And sometimes you do not? A. Yes, sir.

Q. Can you put your finger in these books upon any con-
tract that was abrogated by you ? A. I think I can ; very
many of these are for temporary shipments.

Q. You generally mark it, don't you ? A. Yes, sir.

Q. That furniture had no such mark ; may not that have
been a regular shipment? A. That was a family moving out
to Kansas.

Q. And you facilitated his moving out of the State in that
way ? A. Yes, sir.

Q. Do you know who Hofeld k Gersler are, at Bufi'alo ?
A. Not personally ; no, sir.

Q. Do you know anything about their business? A. No,
sir.

Q. Do yoa know anything about their capital? A. No,

sir.

234

Q. Did you carry the hides pressed in bales for them
by special rate of forty cents to New York ? A. Yes, sir.

Q. To w]}at class do hides belong ? A. About third class,
I guess.

Q. Hides, dry, loose ; dry, in bales, second chiss ; you are
mistaken, therefore, as to classification ; what is the second
class rate from Buffalo to New York, according to schedule?
A. Sixty cents, I believe — seventy-one cents.

Q. That is about forty per cent, below the schedule rate ?
A. Yes, sir.

Q. You say you don't know those gentlemen ; you could
not, therefore, in that particular case have given them that
rate to have developed their business ? A. Perhaps our agent-
did it at Buifalo ; we have an agent there who represents us ;
he would AN rite to me and ask me to name the rate.

Q. Did he in that particular case ? Q. He must, other-
wise I would not have made it.

Q. Kindly fish out from your letters the letter of your
agent, in relation to this entry of Hofeld & Gerssler, upon the
recommendation of which you fixed that rate ? A. I do not
know as I could find it.

Q. Don't you keejD your letters ? A. Yes, sir.

Q. Don't you file them under some index, or is there not
some manner in which you can find a letter or "entry on the
3d of June of this year, and therefore within a few days ?
A. I don't remember the transaction at all.

Q. If you do not remember the transaction how can you say
you received the letter ? A. I say I presume that he ap-
plied to me for the rate ; I am not positive about it.

Q. If he did not, and you did not know anything about them,
it could not have been upon any theory of developing their
business ? A. There may have been a reason for it ; I don't
know anything about it personally.

Q. Do you know anything of G. 0. Cohen, of Bufi'alo ? A. I
do not.

Q. Did you receive a letter on the Bd of June from Buffalo
from your agent there, recommending a special rate for Mr.
Cohen, and giving the circumstances of that man's business ?
A. I don't remember.

Q. You carry for him G. S. hides from Buffalo to Boston at
17^ cents a hundred pounds ? A. Yes, sir ; green salted hides.

235

Q. To what class do they belong ? A. Fourth class.

Q. What is the schedule rate from Buffalo to Boston per
hundred pounds ? A. I am not sure whether it is l?^ cents or
20 cents.

Q. From Buffalo to Boston ? A. Yes, sir ; fourth class ship-
ped at this time.

Q. If it is seventeen cents on schedule rates, what do you
mako a special rate for at 17.7 cents ; the man was anxious to
break into your treasury by putting in half a cent per hundred
pounds more, was he ? A. I cannot recall the facts now ; I
don't know what the taiiff" was at tliat time ; it may have been
17| cents or 20 cents ; I don't remember which.

Q. It is June 3d — this very month — you carried it at 17^
cents per hundied pounds for Mr. Cohen from Buffalo to Bos-
ton ? A. Tes, sir.

Q. Of wbich you took sixty per cent, for your own road? Ai
Tes, sir.

Q. Now, what is the schedule rate from Buffalo to Troy on
fourth class ? A. I believe it is about fifteen cents.

Q. And is it only two cents over the Boston & Albany
Road to Boston from Troy ? A. The Boston and Albany Eoad
don't go to Troy ; it goes to Albany.

Q. What is your special rate from Buffalo to Albany ? A.
Fifteen cents.

Q. And is it two cents on the Boston & Albany from
Albany to Boston ? A. We have an agreed division of rate ;
we divi._le the rate between ourselves.

Q. If this was carried at the schedule rate why does it find
its entry upon this book ? A. I cannot give you the reason
just now ; I don't say it was ; it might have been.

Q. It being on this book is evidence to you it was carried at
a st)ecial rate ? A. I think so.

Q. And isn't that conclusive to your mind that it was car-
ried at a rate below the schedule rate ? A. I would not want
to swear to it in this case.

Q. Isn't it likely? A. It is likely to be a special rate ; yes,
sir.

Q. Now, what do you know about Mr. Cohen,? A. Nothing
at all.

Q. And in this particular case, therefore, you could not have
any idea about developing Mr. Cohen's business ? A. Our
agent at Buffalo might have written me on that subject.

236

Q. Will you kindly find me the letter from your agent at
Buffalo in which he asks for a special rate, and appearing
under 7112, June 3d, Vol. 8. of this contract? A. Yes, sir.

Q. You spoke of this contract with Mr. Leggett, yesterday,
when I asked you about jobbing houses here ; find me that
contract, please ? (Contract produced.)

Q. Tije witness has produced page 241, of Vol. 8, contract
6008, F. H. Leggett & Co. ; they are grocers in tlie City of
New York, are they ? A. Yes, sir.

Q. And on the 3d of May, 1879, the schedule rate was that
which is shown on Exhibit L, isn't it ? A. Yes, sir.

Q. You made a special contract on that date by which you
agreed to ship for Messrs. Leggett (V Co. their fourth class
goods at an average of about fifteen cents a hundred to points
beetween Brockport and Albion on your railway? A. Aver-
age of seventeen.

Q,. And the average between those points, according to the
schedule then in force, was about twenty-eight, wasn't it? A.
Not the average — about tAventy.

Q. What — according to the schedule ? A. Yes, sir.

Q. Between Albion and Brockport ; fourth class ? A. About
twenty-eight.

Q. These gentlemen ship fourth class freight mainly ? A.
Yes, sir ; ninety per cent, of all their shipments are fourth
class.

Q. Therefore their other rates are of no consequence mate-
rially ? A. Not materially.

Q. With how many other grocery jobbing houses in the city
of New York had you on the 3d of May any contract of a like
nature running ? A. I don't recollect any other.

Q. Then Leggett & Co. had in advantage on the 3d of May,
1879, over every other jobbing grocery house of the difference
between that rate and the schedule rate, had they not? A. I
don't think they had, because the most of the men to whom
Leggett shipped had contracts of their own.

Q. The reason they had not advantage over other houses
was because the men to whom they shipped had contracts of
their own? A. Yes, sir.

Q. They might not have ? A. Then Leggett & Co. had the
advantage.

Q. How many other grocery houses did you have contracts
of this nature with ? A. I don't know of any.

237

Q. How many houses in the jobbing dry goods trade have
you contracts with? A. Not one here tliat I am aware of.

Q. How many houses in any other branch of the jobbing
trade have you any such contracts with as that? A. I cannot
recollect; 1 think there is one paint house here who send all
their paint over our road who have special rates.

Q. A special rate as against every other paint house? A.
They wanted to give us all their business and came to ask lor
a special rate and got it.

Q. Other paint houses haven't the 'rate? A. I don't re-
member whether they have or not ; I don't think they have.

Q. D. Copeland is a house to which you make special rates
from Rochester to every point on your railway ; what do D.
Copelani & Co. manufacture ? A. I don't know.

Q. Do you know anything about their business ? A. Not at
this time ; I cannot recollect it.

Q. Did you receive any letter from them ? A. I cannot
recollect the transaction ; it may have been on the recommenda-
tion of our agent at that point.

Q. Will you kindly produce it ; it is 6,086, on page 251 of
Contract Book No. 8 ; this gives to D. Copeland special rates
to transport sewer pipes, in car loads or less quantities, at
fourth class rates from Bochester to all other stations on the
line ? A. Yes, sir.

Q. Have you with any other sewer pipe manufacturers at
Rochester, any contract for special rates ? A. Yes, sir ; the le
is another house there that has special rates.

Q. In Rochester ? A. Yes, sir ; Otis & Grorsling.

Q. Are there any drain-pipe manufacturers at Rochester ?
A. No, sir.

Q. Have both those manufacturers the same rates ? A. I
cannot tell just now ; they have both special rates.

Q. To what degree they differ, you cannot tell ? A. No, sir.

Q. I should like to have you make out for me that difference
between the two rates from your books, of these Rochester
drain-pipe manufacturers ? A. I don't know that there is any
difference.

Further testimony of this witness is suspended until the ex-
amination of the books can be made by an expert.

'238

James H. Butter, sworn :
By Mr. Sterne :

Q. What is roiir full nsime ? A. James H. Euttev.

Q. What is your relation to the New York Central .*^- Hr.ilson
River Eaih-oad ? A. General Traffie 3Iau:iger.

Q. How long have yon been in that i^cisition? A. Two
years.

(..>. Had j-ou before that time any office ? A. Five years be-
fore that I was General Freight Ageut.

Q. That is the position now occupied by Mr. Clark? A.
Yes, sir.

Q. Have you ever held the piwitiou that is occupied by Mr.
Goodman now? A. On the Xew York Central ?

Q. Yes, sir ? A. No, sir.

Q Then your connection with the Xew York Central tt
Hud on Eiver Koad begun after the consolidation of ISlii'?
A. It began in VSl'l.

Q. And yon are at this moment its general freight agent?
A. Xo ; I am its general traffic manager.

Q. You have heard the testimony, haven't you, of Mr. Good-
man? A. Very little of it.

Q. The assistant general freight agent ; he has testilied that
in relation to these special local rates he receives his general
instnrctions from you; that he acts within the limitations of
those general instructions, and that in special instances jje
submits the rate and the proposition to you; is that so? A.
He gets his instructions in a very general manner; not very
often directly from me.

Q. Now, can j'on explain to this Committee the manner in
■which 3-ou issue those instructions to the general fi'eight agent
or his assistant ? A. Verbally.

Q. How often ? A. I could not tell you that ; as often as
occasion requiies.

Q. They are both under yoirr direction, are they not? A.
Yes, sir.

Q. Are you familiar with these books? A. No.

Q. Which have been here produced ; did you know thev
ex.sted 'i A. I presumed such books existed.

Q. Then the system which has been here detailed by Mr.
Goodman ot the manner and method of freight arrangements

239

in the State ot New York, nre not faiii'li.-ir to yoa? A. I will
have to ask you to define what yon mean ; do yoa refer to
those books ?

Q. I refi'r to entries iu those books showing the giving and
receiving of special rates to different amounts and to various
places, and departures from schedule rates in a great number
of instances, according to the number in this year of six thous-
and instances V A. I am not familiar with any of the entries in
those books, if that is what you mean.

Q. I mean with the system ? A. Yes, sir ; in a general way,
you understand.

Q. 'And that .system in a geceral way meets with your ap-
proval? A. Yes, sir; so far as they carry out my instructions ;
if they depart from them I do not approve of them, of course.

Q. What cases are there when these gentlemen, either Mr.
Clark or Mr. Goodman, submit the question of the giving of a
special rate to 30U ; when are they required to do so ? A.
They are not required particularly to do so.

Q. When are they required generally to do so ? A. If they
should have any doubt in their own mind as to what they should
do under the general instructions, they would probably refer it
to me.

Q. Then their instructions are that they are to act accord-
ing to their best discretion, and only refer to you when they
have doubts whether a particular case comes within their dis-
cretion ? A. Yes, sir.

Q. They have nothing to do with the fixing of through traffic
rates ? A. Mr. Clark has.

Q. Mr. Goodman has not ? A. No, sir.

Q. Is Mr. Clark in this country ? A. He is not.

Q. Hasn't he just returned with Mr. Vanderbilt ? A. He
has not.

Q. He went out with Mr. Vanderbilt to Europe ? A. He
went to Europe a month ago.

Q. Who in his absence attends to Mr. Clark's business ? A.
That which would be of a local character, Mr. Goodman ; that
of a through character I would to a certain extent.

Q. Is there any part of the functions of Mr. Clark's office
which remain in abeyance during his absence : that is not at-
tended to at all ? A. No.

Q. When you say you attend to a certain extent to Mr.

'J40

Clark's functions, you mean you attend to aU that which Mr.
Goodman does not attend to ? A. Not entirely.

Q. Who else is there ? A. There are certain matters of
accounting that two of our agents have attended to in his
absence.

Q. Give us their names please ? A. Mr. Crawford.

Q. Who else? A. Mr. Cummings.

Q. Are they in the freight department of the New York
Central & Hudson River Railroad ? A. Thoy are.

Q. What part of the business that Mr. Clark formerly at-
tended to falls to the lot of Mr. Cummings and the other gen-
tlemen? A. As I stated, those matters relating to certain ac-
counting between this company and certain other railway com-
panies.

Q. The division of the amount of freight ? A. Settlements
of overcharges, loss and damages, and the various items of
account that might come up between the New York Central
Company and other railway companies.

Q. Are you in charge of the affairs of the concern known as
the Merchants' Despatch ? A. I am not.

Q. Who has charge of that ? A. W. F. Stanton is the acting
manager of that company.

Q. Has he an office iu the .freight office of the New York
Central Railway ? A. He has not.

Q.. Where is his office? A. 335 Broadway.

Q. The Merchants' Despatch uses the cars of the New York
Central, does it not? A. On some occasions it does.

Q. It runs over the New York Central exclusively, does it not,
so far as New York traffic is concerned ? A. Yes, sir.

Q. And runs west? A. Yes, sir.

Q. It is a special organization ? A. Yes, sir.

Q. Separate and apart from the New York Central &
Hudson River Railway ? A. Yes, sir.

Q. Who has charge of the contracts between the Merchants'
Despatch and the New York Central and Hudson River
Railroad, and the arrangements between those two corpora-
tions as to the running freight on the New York Central road?
A. I am not positive whether there is a contract in existence
between the companies.

Q. Assuming, there is, who would have chaige of the con-
tract ? A. The Auditor of the New York Central Company.

241

Q. Tou are willing to swear that you have not ? A. I have
not the contract.

Q. Tou perform no function for the Merchants' Despatch at
all? A. No.

Q. Do you know anything of its traffic and the amount
thereof that it carries as compared to the amount carried on
the New York Central and Hudson Eiver ; I mean the amount
as compared to the amount carried by the railroad company
in its own corporate capacity ? A. "Well, I cannot say that I
do.

Q. Have you brought with you the books and papers which
are mentioned in the subpcena which has been served upon
you, copies of all schedules, through and local freight rates,
all special local or through contracts, and book oi- books contain-
ing records thereof, and copies of all circulars regarding the
rates issued, made and in force at any time during the last
past three years between the Hudson Kiver Company and the
Western Railroad Companies, to shippers and customers to
other railroad companies ? A. I have not.

Q. You can bring these things by Monday, can you not ?
A. I don't believe I can bring all that are specified.

Q. Bring as many as you can ?

The Chairman — Are not the books now in the possession of
the Committee ?

Mr. Steene — They are entirely a different set of books.

The Witness — I can bring tariffs. If I recollect my sub-
poena, however, it only called for those for the year. I only
arranged for producing those of the past year.

Q. You can give directions ; you have how many clerks un-
der your directions ; forty or fifty, haven't you ? A. Two
clerks and a boy.

Q. In your own office ? A. Yes, sir.

Q. But Mr. Goodman, who is under your direction, has tes-
tified he has some fifteen ? A. Yes, sir.

Q. And these other gentlemen who are uuder your direction,
Mr. Clark and others, have a certain number, haven't they ?
A, Mr. Clark's and Mr. Goodman's clerks are in common.

Q. How many departments do you superintend of the Hud-
son Biver & New York Central Bail way ? A. Two.

Q. What are they ? A. Passenger and freight.

Q. In the passenger department there is a large number of
19

242

clerks ? A. That depends upon what you call a Ipge number ;
there are probably six or seven.

Q. So that you certainly have under your control some
twenty-two or tAventy-three clerks? A. I suppose, indirectly
you might say they are under my control.

Q. And I suppose yon could get tliese papers, sir, with fa-
cility, without much trouble to yourself ? A. I could if it was
any other day than Saturday.

Q. You will fetch what you can ? A. I certainly will.

Q. Mr. Vanderbilt, in liis letter—who is your chief, says,
" he is wiUing to supply this Committee with every possible
" information necessary to adduce information on this ques-
" tion ?" A. I am willing to do so ; only tell me what you
want, and I will try to do my best.

Th e Chairman ;

Q. Your subpoena said one year ? A. That is my recollec-
tion of it.

The Chaikman — It seems to me one year is ample.

Mr. Stebne — There are special reasons why we want it to
run over the year.

By Mr. Steene :

Q. In what book or books are special rates entered for
through. shippers in the New York Central Railway office?
A. Well, I could not tell you, sir.

Q. There are special rates made for through shippers ? A.
Very few ; in fact, I guess — I won't guess ; I will say positively
that westward bound there are none made.

Q. East bound? A. East bound ; if there are any contracts,
they are made by western railroads.

The Chairman:

Q. Let me understand you ; there are no special rates made
on westward freight going beyond the bounds of the State ?
A. Yes, sir.

By Mr. Sterne :

Q. We have found in these books a number of special rates
made on west bound freight running from interior points of
the State of New York to points further west — quite a number
of tliem ; so you are mistaken as to that, are you not? A.
I beg your pardon ; I didn't suppose you were asking a ques-

243

tion ; I supposed you were making a remark ; give me a ques-
tion and I will answer it.

Q. When you say there are no special rates made west
bound from Now York, you are mistaken in the face of these
entries contained in these books ? A. I referred to New York
City.

Q. Then you are prepared to say that there are no special
rates named from New York City to western shippers ? A. I
do say to the best of my recollection ; I don't remember any ;
don't think there are.

Q. And never were ? A. No ; I don't say that.

Q. Isn't it true, that it is only since the pooling arrangements
have gone into force that these special rates to west bound
shippers from New York have ceased ; from New York City
have ceased ? A. Yes, sir.

Q. When did these pooling arrangements begin ? A. Two
years ago ; about two years ago.

Q. You have stated that the western railways named these
special rates to shippers over your road ; can they name special
rates to shippers over your road without your consent ? A.
Yes, sir ; they can without our direct consent.

Q. Do they, as a matter of fact, name rates to shippers over
your road without your consent, other than the schedule rates?
A. Yes, sir ; let me explain ; under a general arrangement be-
tween the eastern railroads and the western railroads; the right
is accorded to the western roads to make east bound rates, we
reserving to ourselves the right to object to them if they don't
suit us.

Q. Then, practically, instead of in each special instance con-
senting, you consent in a wholesale sort of way to these special
arrangements ; that is what it amounts to, is it ? A. There
might be a difference between us as to special arrangements ;
if you mean that a special contract or a special rate is made by
railroads for one party and not made for others, it is not a
thing that is generally done.

Q. Of course not generally done, because if it was it would
not be special? A. That is not what I mean ; I do not intend
to have the construction placed on my remark that you do.

Q. You say it is not generally done ; that I am perfectly
willing to concede ; now, do you or not have those special

244

rates under this arrangement that you spoke of submitted to
you? A. No, sir ; not generally.

Q. Then, what possible use is there in making an arrange-
ment, to which you have testified, with the western roads,
to reserve to yourself the right of a veto upon any arrangement
they might make ? A. They might make it lower than we
wanted to carry it.

Q. How will you know if the rate is not submitted to you ?
A. We would not know, as a rule, until the property reached
us — until it reached our western terminus.

Q. Until it reached your eastern terminus ? A. I said our
western terminus.

Q. Would you feel at liberty to refuse to carry that traffic ?
A, Under some circumstances ; yes, sir.

Q. Have you the contracts or contract which have been
made between the New York Central and Hudson River Eail-
road and the western raHwajs upon that subject ? A. I have
not.

Q. Is that in your department and under your control ? A.
That business is generally under my control ; yes, sir.

Q. Then where is that contract ? A. We have some con-
tracts for the formation of what we call lines ; but otherwise
what you term a contract is an agreement, generally by resolu-
tion in meetings.

Q. Well now, how and where and in what way is the evi-
dence preserved of the arrangement such as you have testified
to, or any like arrangement or arrangements that have been
made within the past few jears with the trunk lines and other
connections ? A. What arrangements do you refer to ?

Q. That which you have testified to ? A. I testified to sev-
eral ; name the one that you want me to speak about.

Q. You spoke of a contract you have with the western rail-
ways by which they are to name the rate that your road is to
earn on east-bound freight; now I want to see that contract,
or a copy of it, and I want to know who lias it.? A. Anything
that is in the shape of contracts I think I have copies of ; the
originals I have not.

Q. Ton spoke of a specific contract which must have been
in your mind at the time you spoke of it ; can you produce
that contract ? A. I spoke of a specific contract between our

245

roads and the connecting roads in the formation of what we
call lines ; I have copies of those contracts.

Q. Be kind enough to produce those ? A. The copies ?

Q. Yes, sir ; if you swear they are copies I am perfectly
willing to take your statement as conclusive.

Adjourned to Monday, June 16th, 1879, at 10:30 A. M.

New Yoek, June 16, 1879, 10 a. m.

The Committee met pursuant to adjournment.

Present : All the members except Mr. Geadt.

Messrs. DuGTJiD, Teeey and Wadswoeth, the sub-committee
appointed last Saturday, were granted leave of absence while
engaged in the performance of their work. Mr. Grady was also
excused. The remaining members of the Committee, Messrs.
Hepbuen, Husted, Low, Notes and Bakee, were appointed a
sub-committee to proceed with the investigation.

James H. Butter, recalled :

Mr. Steene — I understand that Mr. Eutter has a correction
to make in his testimony of last Saturday. He might as well
correct it now.

The Witness — I stated that the contracts of the company
were in the custody of the Auditor, instead of which I should
have said that they were in the custody of the Secretary of the
company.

By Mr. Steene :

Q. The name of the Secretary, please ? A. E. D. Worcester.

Q. What contracts, documentary evidence, freight schedules,
and books have you brought ? A. (Witness produces papers).
I have copies of the fast freight line contracts, and I have
copies of our through western bound tariff, back to December,
1877 ; I made a mistake in not getting them back as far as the
subpcena calls for ; I supposed that my subpcena was for a
year, until I read it this morning, and I have sent for the ad-
ditional copies.

246

Q. Did you also briug with you the book or books con-
taining special rates to persons shipping or forwarding on
your railroad, through traf55c, western bound, within the past
three years ? A. I did not.

Q. That is embraced within your subpoena ? A. I do not
think there are any such books, other than you have seen.

Q. Mr. Goodman told us that the books that he has charge
of are books that relate to local traiEc only, and that the
through traffic is in your hands, and that he has not charge of
those books ; the books also which he has brought are books
which embrace contracts only within a year past ? A. If
there are any such books I will produce them ; there are none
in my office ; there may be books in other offices, and if there
are, I will produce them.

Q. The offices are under your control, however ? A. Yes.

Q. You are general traffic manager of that railroad? A.
I am.

Q. When you speak of your office, you mean the office which
joii personally occupy in the building ? A. Yes, sir.

Q. Therefore, will you have kindly a search made for those
books? A. I will.

Q. Showing the through traffic special rates anterior to the
pooling contracts which have been made within the past two
years? A. Yes, sir.

Q. You wiU bring them to-morrow, will you ? A. I will, if
there is any such.

Q. Is it, or is it not, a part of the economy of 3'our railway
administration, that you have charge of the through traffic, and
Ml-. Goodman of the local ? A. I have charge of the whole;
Mr. Goodman has particular charge of the local.

Q. If there were any special rates to shippers within the
past three years, either eastward or westward bound, on your
railway, tlie entries would necessarily have been made some-
where upon the books of the New York Central road, would
they not ? A. That is a matter of detail that I cannot answer ;
if there are any such books I will bring them.

Q. How would you know how to make out shipping bills or
freight bills under a special arrangement, if you had not some
means of knowing what the special arrangement was ? A. I
should not make out shipping bills.

247

Q. You personally do not, but I mean your department ?
A. Do you mean the clerks — the men that do that kind of work ?

Q. Yes. A. They would have orders.

Q. From whom ? A. From the General Freight Agent, or
the Eastern Freight Agent who has particular charge of this
through westbound business.

Q. If you have not particular charge of the through west-
bound business, pray tell me who has ? A. ItoM you on Satur-
day that Mr. Crawford had.

Q. Does he name special rates without your consent and
without your" knowledge ? A. No, sir ; he does not name any
now. I

Q. Did he within the past three years ? A. No ; he had
general consent to do it ; he did not have to ask each case.

Q. Then, Mr. Crawford would be the man who could answer
me those questions as to details ; what is his name ? A.
liobert L. Crawford.

Q. These two tariffs that you have broilght me here, are they
eastbound or westbound ? A. Westbound.

Q. Where are the eastbound tariff rates? A. You have
had these before.

Q. I had the local before? A. That is all the tariff' we have
got.

(The tariff produced by the witness is marked by the Chair-
man "Exhibit 1, June 16, 1879.")

(Also another tariff produced by the witness, marked " Ex-
hibit 2, June 6, 1879.")

Q. The tariffs tbat you have produced are tariffs of west-
bound rates as far as Kansas and Colorado ? A. Yes, sir.

Q. And to Canadian and intermediate points ? A. Yes,
sir.

Q. Is there any tariff of eastbound freight rates from the
same points embraced within this westbound tariff? A. No,
sir ; there is a tariff there in that package that I handed you,
from Buffalo, eastbound.

Q. That is called the local tariff, is it not? A. It is both
local and through.

Q. Through in the sense tbat you railway men use the word
through ? A. Through from Buffalo.

Q. But not through in the sense of being through to the

248

points to which your various lines, Blue Line, Bed Line, and
cither lines go ? A. No.

Q. If a shipper in New York City, or a consignee in New
York City, wants a rate from Kansas City for a quantity of
freight to New York, how do you give it to him ? A. We
should refer him to Kansas City to get it.

Q. And likewise as to all other points west of Buffalo ? A.
Yes, sir.

Q. And there is no tariff printed from the western points ?
A. There is by the western roads ; not by our road.

Q. Is the arrangement between you and the westei'n roads
that jou name the rates on their roads and they name the
rates on yours ? A. The rule is that the western roads name
the eastbound rate, and we name the westbound rate.

Q. Subject to the veto that you mentioned on both sides ?
A. Tes, sir ; subject to our right to object.

Q. On both sides? A. Yes.

Q. What determines these rates on this westbound tariff ?
A. What determines it ?

Q. Yes. A. I don't know what you mean by the question.

Q. When you come to make out a schedule of rates for
westbound through traffic for all points in the United States
with which your railway has any connection, upon what basis
do you calculate the rate, and upon what basis do you calcu-
late the classification ? A. All rates are based upon Chicago ;
Chicago has been fixed year after year by steady reduction of
the rate until it has reached those figures shown on that
tariff ; I don't know that I can tell you what that classification
was based upon ; it has been in effect for a great many years,
with, perhaps, some sligljt changes.

Q. And so you, as the General Trafiic Manager of the road,
do not know what the basis of this classification is '? A. Do I
understand you are asking me a question ?

Q. Yes. A. Will you please put it in the form of a ques-
tion?

Q. You do not, although you are General Tratfic Manager of
the railway, know upon what basis the general classification
of your different classes is based ? A. That classification was
made a great many years ago — before I was General Traffic
Manager ; generally a classification is based upon the value,
the bulk, to a great extent the quantity, and somewhat the

249

quality of the article ; for instance, sugar, being a heavy and
comparatively cheap article, and large quantities of it shipjied,
is placed in the fourth class, being the lowest.

Q. If you fill a car with first class freight does it not gener-
ally weigh as much as fourth class freight ? A. No, it does
not ; it does not average as much.

Q. Can you not get a full car of first class freight? A. We
could of the same kind of first class freight.

Q. Have you ever made the calculation between what it
costs you to handle goods at terminal poiuts and what the
haul costs you ? A. No.

Q. A car holds about ten tons, does it not ? A. It depends
entirely upon what it is loaded with ; our cars do not average,
going west, ten tons.

Q. I mean it is gauged for ten tons ; the springs and all
the machinery of the ear is based upon a weight of ten tons ?
A. We can carry more than ten tons in a car.

Q. Tou can carry more ? A. Yes.

Q. Would you consider it rather heavy laden if more ?
A. Yes ; ten tons is generally considered a car load.

Q. Now, when you have ten tons in a car, and the door of
the car is closed, and the haul begins, is there any difference in
the expeuse of the haul from New York to any given point of
first class freight as compared with fourth class ? A, No ; I
should say not ; that is, I understand jou to assume that
there is ten tons in the car.

Q. I assume that a car being fully laden, the door of it
closed, and the engine before the train, is there any difference
in the expense of hauling first class freight, ns compared with
fourth? A. There would be, as first class freight does not
average as much to a car load.

Q. What is the average to the car load less on first class
freight than on fourth class? A. I don't believe I can answer
that question; I can only say that our westbound cars aver-
age between six and seven tons.

Q. Is not that true, because you do not need to load your
westbound cars fully, and you have a larger number of cars
running empty, westward, than eastward ? A. No ; not entirely
so.

Q. Somewhat due to that? A. Very little; in fact nothing,
I may say, from New York ; we load our cars just as full as we
20

250

can, and send them to the destinations to which we desire
them to go.

Q. Don't you run a great many empty oars westward ? A.
Yes, sir.

Q. Isn't it true that about one-third of your cars run empty
westward ? A. I don't believe I can answer that accurately.

Q. Can you answer it approximately ? A. There are certain
cars which we cannot load westward ; cattle cars, and oil cars
and oil tanks ; that kind of cars ; I should say that more than
half of our cars went out of New York loaded ; I should think
so ; we have been frequently obliged to haul empty cars to New
York at certain seasons of the year.

Q. When you haul them to New York at certain seasons of
the year, you haul them, don't you, from Boston, • and other
points to which you run full cars — eastern points ? A. No,
sir ; we don't haul anything from Boston.

Q. Perhaps you misunderstand me ; you don't haul empty
cars all the way, from the west, for the purpose of loading
them at New York; when such an exigency arises, don't you
answer it by hauling empty cars from eastern points ? A. We
generally do it by hauling them from Albany, but we have been
obliged to haul them from Buffalo.

Q. That is a very rare case, isn't it ? A. Yes, sir, it is.

Q. Can you tell what proportion of your freight traffic sent
over the New York Central <fe Hudson River Railroad goes
and comes from local points, and what proportion goes and
comes from through points west of Buffalo ? A. Do you mean
to and from New York?

Q. No, not entirely to and from New York ; I mean what
proportion of your freight traffic that is done on the New
York Central & Hudson River Railroad is done for local
points which, of course, include New York, Buffalo and
Aib.my, and what jjroportion is done for through points west-
ward, of the whole traffic of the road? A. I could not tell
you.

Q. Suppose Mr. Vanderbilt were to put the question to
you: " Mr. Rutter, I wan't to know how much of the earn-
ings of my road are derived from local, and how much from
through traffic," what answer would you make to him? A. If
he wanted me to answer him right on the spot, I should an-
swer him just as I have you — I did not know.

251

Q. Suppose he should saj to yon, then : "1 want you to
find out," what answer would you make to him ? A. I would
tell him I would do it.

Q. Now will you do it for this Committee ? A. If the Com-
mittee wants that, I will endeaver to get it for them.

Q. I beheve I speak for the Committee in asking that infor-
mation for them. (To the Chairman.) Mr. Hepburn, will you
kindly ask for it ?

The Chairman— Yes, we would like to know.
Q. Now, Mr. Eutter, what proportion of th^ income of the
New York Central &. Hudson Eiver Eailroad is derived from
its local traffic, and what proportion from its through traffic per
year? A. I don't remember.

Q. Now, suppose, again, that Mr. Vanderbilt wanted to have
that information from you, he being the President of the road

and you its Traffic Manager A. I will save you that

trouble ; if it is possible to produce the information, I will do
it to-morrow.

Q. Produce it, please, for the last two years, it will be quite
sufficient. The volume of the local traffic and its value ;
that is information which you have never given to the State
Engineer in your reports under the law ? A. I think not.

Q. And you have never been asked to give it? A. Not that
I am aware of.

Q. This Merchants Despatch Transportation Company — is
that what is known in railway parlance as a co-operative line ?
A. No.

Q. Will you tell this Committee the distinction between co-
operative lines and special lines ? A. A co-operative line is
one made up of a number of railway companies ; a line is
made by each road putting in a certain number of cars, under
some rule that is fixed, and agreeing to pay jointly the ex-
pense of the management and running of the line.

Q. That is done for the purpose of preventing the breaking
of bulk, isn't it ? A. Principally ; yes, sir,

Q. A great many of these lines which are now co-operative
lines were once special lines, were they not ? A. No ; none of
them, to my knowledge.

Q. The Blue Line runs over your road, doesn't it ? A. Yes,
sir.
Q. The Eed Line ? A. Yes, sir.

252

Q. The Arrow line ? A. No.

Q. What . co-operative lines run over your road ? A. Bed,
White, Blue, Canada Southern, Hoosic Tunnel.

Q. What is the special line to which the Merchants Despatch
belongs? A. The Merchants Despatch is a corporation, I
believe.

Q. You say you believe ; don't you know ? A. No, I don't
know anything about their affairs — their internal affairs.

Q. What? A. I know nothing of their affairs, except as
they do business with the road — do business for the road, I
should say.

Q. They do the freight business for the road, do they ? A.
They do a portion of it.

Q. What proportion of the freight business that runs over
your road, to through points, is done by the Merchants De-
spatch as compared with that which is done by your corpora-
tion in its proper corporate capacity ? A. All of our through
business is done by these lines that I have spoken of.

Q. On some of these lines that you have spoken of, those
which are co-operative lines, the business is really done, so
far as you contribute cars to the lines, by the company, isn't
it? A. It is done in co-operation with other companies.

Q. And whon a iinal settlement is made between the com-
panies they divide, pro rata, in conformity with the mileage of
each road, don't they ? A. Divide the earnings.

Q. Divide the earnings ? A. Yes, sir.

Q. And the earnings division is in conformity with the mile-
age, isn't it ? A. Yes, sir.

Q. Has it any other basis ; you know better than I do ?
A. I think I have answered you correctly all the time.

Q. I have no doubt of it ? A. The contract shows just
what it is.

Q. These contracts, however, which you have furnished me
with, do not embrace the other contracts — the one with the
Kansas Line ? A. There is no Kansas Line.

Q. Canada Southern Line ? A. Yes ; that is there.

Q. Is the Eed Line there, also ? A. No ; the contract' with
the Red Line ran out ; there is no contract ; we are simply car-
rying along the old agreement.

Q. You mean there is no new contract ? A. There is no
new contract.

2S3

Q. With the old agreement existing ; why didn't you bring
that ? A. Simply because it is oiit of date.

Q. Tou are working under it in making the division ? A. I
don't think we are working exactly under it.

Q. Under what arrangement are you working ? A. We are
working under the general arrangement that we have with all
our lines, and when you have read one of the contracts you
have got, substantially, what there is in all of them ; there
are some slight variations.

Q. The contract with the Merchants Despatch Transpor-
tation Company, is, I see, dated the 1st of January, 1874, and
runs for t^n years, does it ? A. I believe it does ; I don't know ;
I did not sign the contract ; I don't know that I ever saw the
original contract.

Q. Have any modifications of this contract been made ? A.
Not that I am aware of.

Q. Can you tell this Committee what proportion of the
through traffic is carried by the Merchants Despatch, as com-
pared with what is carried by your railway and all these other
lines which are co-operative lines ; in other words, how much
is carried by this special line which is non-co-operative, as
compared with those which are co operative, and the corpora-
tion itself? A. I don't think I could tell that from memory.

Q. You have the basis of the information, haven't you, in
your office ? A. Yes, sir.

Q. You will furnish that, won't you ? A. Yes, I can.

Q. The Committee will want it, I think. Who are the
officers of the Merchants Despatch Transportation Company?
A. J. C. Fargo is the President, and W. F. Stanton is the Sec-
retary and Acting Manager

Q. Its office is in the west, isn't it ? A. The office is in
New York.

By the Chairman :

Q. Who is Treasurer ? A. I don't remember, but 1 think a
gentleman named Holland ; I am not positive about it.

By Mr. Sterne :

Q. Is not its main office in Cleveland ? A. The Manager's
office is in Cleveland.

254

Q. The General Manager ? A. Yes, but lie is ill, and absent,
and his duties are performed temporarily by Mr. SfaiDton,
whose office is here.

Q. Is that a joint stock corporation ? A. Yes, sir.

Q. Organized under the laws of the State of New York ?
A. I don't know.

Q. Are you yourself not a member of it? A. No.

Q. Not a stockholder ? A. No.

Q. You stated last Saturday that on westbound traffic you
now have no special rates ? A. Yes ; I did state so, and I
made a mistake in stating it; that is the testimony that I
wanted to change ; there is one contract

Q. That is still running? A. Yes, sir.

Q. That was made, probably, anterior to the pooling ar-
rangement, was it ? A. I could not tell you exactly when it
was made, but it has been made since the pooling arrange-
ment ; the contract made through Mr. Fink on behalf of all
trunk lines.

Q. Do you mean the pooling contract ? A. No ; I mean a
freight contract.

Q. For what freightor is that? A. A contract with the
Hudson Bay Company — a contract which was made to bring
goods through the City of New York instead of going
through Montreal.

Q. And that is a special contract for a special rate ? A.
Yes, sir.

Q. Ellis is the head of that, isn't he ; known in England as
Bayor Ellis? A. I don't know who the men are ; I never met
them.

Q. Is that the only westbound special rate now subsisting ?
A. The only one that I know of that we are in any way re-
sponsible for.

Q. Understand me ; is that the only one now existing, by
virtue of which goods go over your line at special rates, west-
ward ? A. It is the only one I can think of ; it is the only one
I know of.

Q. When did the last special contract other than the one you
have mentioned run out ? A. The 21st of July, 1877, I think,
or about that time ; I would not be positive as to the date.

Q. Now, as to eastward bound special contracts ; there are a

255

number of those in existence for special rates ? A. I presume
there are ; yes.

Q. With houses in the City of New York ? A. Those ar-
rangements are almost entirely made in the west.

Q. But they must be made with your consent, must they not?
A. With our general consent ; yes.

Q. When they give a special rate, differing from tbe agreed
special rate in the west, don't they ask your consent first ?
A. No.

Q. And you generally take a, pro rata oi that special rate as
compared with a pro rata of the general rate from tbe west-
ern railroad ? A. Yes, sir.

Q. Does not that give the western railroad, as compared
with your railroad, a very large advantage if you name those
special rates which they are required to take on western bound
traffic ? A. The western roads have to meet competition be-
tween themselves, and on our behalf, against our competitors,
and ihey must have authority to act on the spot without be-
ing obliged to consult with us ; if they did not they would not
get business, nor we either.

Q. I did not ask for the reason, but I am quite willing to
have it ; then, a freight agent at Kansas City, at Quincy, or at
Houston, Texas, can name a special rate for you, differing
largely from jour schedule rate at which you are bound, or
feel yourselves bound to deliver goods in the City of New
York, and make out your freight bills accordingly, and take
your pro rn/rc on that special rate, is that it? A. Mr. Sterne,
you embarrass me very much by your manner of asking ques-
tions ; you make an assertion, and then give it a tone of in-
terrogation, and I don't understand whether you are asking me
a question, or simplj' making comment on my testimony ; if
yon will liave the kindness to ask me questions, I will answer
them to the best of my ability.

Q. Is it true — that is certainly an interrogative foim — ihnt
a freight agent in the west can name a special rate for j'ou,
differing largely from your schedule rate, at which you are
bound, or feel yourself bound, to deliver goods in tlie City of
New York, and make up your full bills accordingly, and take
your pro rata on that special rate? A. Yes, unless we should
have previously given notice that we would not do it.

Q. What proportion of the eastbound traffic is carried

256

under such special rates as compared with the schedule rates ?
A. I could not tell you.

Q. Suppose Mr. Vauderbilt wanted that information, what
would j-ou tell him ? A. I should tell him I could not tell him.

Q. Could you get the' information ? A. I don't think I could
— not very easily ; it would be an enormous labor to do it.

Q. How do you know then, if you cannot tell that, at what
average rate your company is compelled to make a h.iul from
Buffalo to New York during any given period of time? A. I
know generally what the rates are.

Q. Do jou know anything as to what it costs you to trans-
port goods by rail? A. That is a thing that nobody has ever
beeu able to decide.

Q. You know that there are books written upon that sub-
ject, of the cost of transportation ? A. I know there was one
book written on it once ; I think by Mr. Fink.

Q. And Mr. Chanute and others have written books on the
subject ? A. I never saw his book.

Q. Mr. Ferguson, and a great many English railway engineers,
have written books on that subject, haven't they ? A. I don't
know.

Q. You have not seen them ? A. I have not seen them.

Q. Have you ever made any investigation, personally, as to
what it cost your railroad per ton per mile, or per hundred
per mile, to carry its tiafSc ? A. I have tried to.

Q. Have you arrived at any conclusion ? A. No ; nothing
definite ; it is impossible to tell what portion of my salary
should be charged to the passenger business, or what poition
of Mr. Depew's shall be charged to it ; and until that can be
ascertained definitely, it is very difficult to tell accurately what
it costs.

Q. Haven't you tried to ascertain, independently of the office
salaries, how much the mere traffic cost of the railway is per
ton per mile ? A. The cost depends entirely upon how much
business is done.

Q. The cost is very much reduced by the volume of busi-
ness, isn't it ? A. Yes, sir.

Q. What influence, think you, the volume of business has
upon the cost of transportation? Ai I am not prepared to
answer that accurately.

Q. Well, approximately ? A. I think that we might double

257

our business and perhaps not add twenty-five per cent, to our
expenses.

Q. What influence do you think that grade has upon the
cost of traffic ? A. That what ?

Q. Grade — the grade of the railroad, the amount of mechan-
ical power that must be expended by an engine on a given
piece of road? A. I don't profess to be an expert, and I am
inclined to think you are asking me for expert testimony ; I
would not undertake to answer the question.

Q. You have never taken the trouble to inquire ? A. I have
at times formed an opinion on the subject.

Q. I do not ask you now to give me an engineering formula,
but I am asking you generally, what, think you, is the influence
of grade upon the cost of transportation '? A. I have no doubt
that heavy grades very largely increase the cost.

Q. What percentage should you think ^s .idded to the cost
by the grade? A. That is rather a difficult question for me to
undertake to answer.

Q. You have not, even in your mind, an approximate idea ?
A. No ; I have not.

Q. What influence lias cost of fuel upon cost of transporta-
tion? A. It would have an influeuce, of course.

Q. What proportionate influence has it; for instance, let us

put it in a more concrete form ? A. I will save you the

trouble ; I will say I don't know.

Q. I don't want you to save me that trouble if you do know?
A. I do not know.

Q. You do not know ? A . I do not.

Q. Then of the four elements that enter into the cost of
transportation — fuel, grade, bulk of traffic and kind of traffic —
you have but one estimate, and that is as to the bulk of the
traffic? A. That is another of those questions of yours that I
cannot answer.

Q. You have but one in your mind ? A. But one what ?

Q. But one of these elements of the cost of transportation ;
there is but one element that you have paid any attention to, and
that is the bulk of the traffic ? A. I have paid attention to the
general cost of the traffic ; I know from the company's report
how much we earned i)er ton per mile for the last year ; T know by
the report what the cost was ; I formed an approximate idea of
what the cost per ton per mile is, but it is only an approximation ;

■J.-}^

I cauuot state exactly what it was ; then, if with a certain busi-
ness last year, it eo~t us a certain snm to do that business, if
■ff-e increase our business the next year I know ^ve are- doing
it for less than we did the year before.

Q. Less costs ? A. Yes. sir.

Q. Then, for instance, as to local points with each increase
of business do you lessen the cost to the shipper; in other
words, do you change your tariff as your business increases,
year by year? A. We haTe changed our tariff, year by year,
and changed our rates and increased our business.

Q. You are speaking now of through business, are you,
while I am talking of local ? A. I am talking of local.

Q. Hr. Goodman says that until last year, substantially the
bulk of the tariff' wa^ the same for fift'-eu years as to local points ;
is he mistaken about that y A. I did not say tariff; if I did, I
corrected myself and said rate.

Q. Then you are speaking of special rates V A. Yes, sir.

Q. Youi' tariff rates, however, for fifteen years, have practi-
cally and substantially remained the same until the last year-?
A. Is that a question ?

Q. Yes. A. I don t know ; I have not been in the employ
of the company fifteen years.

Q. Well, since you Lave been in the employ of the company '?
A. After I went into the employ of the company there was, I
think, quite a material change made in the tariffs.

Q. How long did that material change last'.^ A. It has
lasted ever since.

Q. There has been no modification since ? A. I think there
have been ; I cannot tell you without referring to the tariff
and making a comparison ; I don't remember.

Q. The cost of transportation has very materially decreased,
hasn't it, since 1870? A. Yes; I think it has, verv materi-
ally.

Q. From .50 to 60 per cent.. ha=n't if? A. I would not un-
dertake to say what.

Q. Has not the general cost of transportation decreased hi an
exact relation to the decrease in the value of other services and
other commodities, within the past five or six years? A. I
wont undertake to answer the question, sir ; I don't know any-
thing about it.

Q. Do you publish these schedule rates for the information

259

of all the world? A. When we print them we give them to
any one who wants them.

Q. Do you circulate them ? A. We do not specially circu-
late them ; no.

Q. Do you post them up ? A. I don't think we do.

By Mr. HuSTED :

Q. You have them at your stations along the road? A.
Tes, sir.

The Chairman — From a remark you made Saturday in re-
gard to the books then present it seemed to be your under-
standing that they were received in evidence, and I want to
know whether you have the same understanding in regard to
these schedules?

Mr. Sterne — Tes ; I thought they were all considered in
evidence — the schedules ; we shall, of course, not want all
these schedules. An arrangement ought to be made, it seems
to me, analogous to that which is made when a large amount
of documentary evidence is produced in a court of equity;
there is a mass of it that is not wanted at all ; lor instance,
they mark a package " N. Y. C, St. John's Park, No. 5, East
Eiver," " North River," &c.

The Chairman — I did not have that understanding ; I
thought they were marked for identification simply, to be
offered in evidence subsequently. I want to eliminate all of
this matter possible. Of course, a great many of these papers
were rc.arked for identification simply, with the understanding
that they should be revised by counsel afterwards, and such
portions put in evidence as were desirable.

Mr. Sterne — Perhaps that would be the best plan.

(Copy of the contract of the Merchants Despatch Transpor-
tation Company with the New York Central and Hudson River
Railroad, and the Lake Shore and Michigan Southern Rail-
road received in evidence, and marked " Exhibit 3, June 16,
1879.")

Q. You say as to all these other lineS they are co-operative
lines? A. Yes, sir.

Q. The Merchants Despatch is the only one not ? A. Yes, sir.

Q. Now, the contract with the American Express Company,
did you fetch that ? A. No, I did not.

260

Q. Will you do so by to-morrow morning? A. Yes, if I
can find it.

Q. You furnish a certain number of cars according to your
mileage, and the other corporations furnish a certain number
of cars according to their mileage, and you create an organiza-
tion by which you appoint a general &,gent to forward traffic
upon those lines, and then you divide the earnings between the
various companies, is that it ? A. Yes.

Q. That is substantially it? A. I should like to introduce
this Canada Southern Line contract, simply because it is
printed, and I would like to have the Committee understand it.

Q. I want the Committee to understand it also, of course ?
A. Then why shouldn't you take this instead of all these others?

Q. I simply guessed at the Blue Line and White Line ; I take
it they are substantially alike ? A. They are substantially alike.

Q. Therefore it is immaterial which one we take? A. Then
I will give you this ; I have other copies of that, but of these I
have not.

Q. In relation to the manner of the business of these through
lines which are co-operative, tell me what control have you
over the freight agents or general agents of those lines as to the
freight charges eastward or westward bound ? A. We have
only a control so far as our own road is concerned.

Q. Therefore they have it in their power to make cut rates
practically ? A. They have, if the road upon which the freight
starts authorizes it; we do not give the agents or managers of
these lines any discretion or authority to make Tates ;-they are
made by the officers of the railroads themselves.

Q. But these managers of these lines, do not when they are
asked to make a rate, first go to the railway company and get
the assent to the rate, before they make the rate, load the car,
and the freight bill is made out in the name of the line, not in
the name of the corporation? A. They do not mjike the rate,
nor they do not load the cars, and they do not do anything that
you stated just now in your remark.

Q. Now, what do they do ? A. They solicit from the shippers
the freight, and endeavor to get it carried by their line ; if any
rate is made different from the established tarift rate, they first
obtain the consent of the proper officers of the railroad upon
which the freight starts.

261

Q. His consent being obtained, implies the consent of the
rest ? A. Yes, sir.

By Mr. Shipman :

Q. For the time being ? A. For the tine being.

By Mr. Sterne :

Q. For that shipment? A. Unless, as I have testified before
we have given previous notice that we would uot.

Q. There is no cutting of rates, you hnve said, westward
bound ? A. Not by the trunk lines ; there may be cutting of
rates west of us that we do not know anything about, but
nothing that we are responsible for that I can think of or re-
member.

Q. On eastbound traffic, however, there is ? A. I do not
tliink there is at this present time.

Q. When you speak of the present time do you speak of the
recent eastbound freight arrangement which has been made
between the trunk lines ? A. Yes, sir.

Q. That is only of a week's existence, isn't it? A. A week
or ten days.

Q. Before that there was a cutting of rates, wasn't there, on
eastbound traffic? A. Yes, sir.

Q. Now, tell me wasn't there a cutting of rates to particular
houses ; that is, that particular houses received rates lower
than the general public ? A. No.

Q. You know of no shipments of lard at lower rates from the
west than to the general public ? A. I know of none ; no,
sir.

Q. You know of no eastbound rates on shipments of
grain at lower rates than to the general public ? A. I think
not.

By the Chairman :

Q. I find here in Exhibit No. 3, something that I do not
understand, " short freight," in parenthesis ; what does that
mean ? A. Short freight is lost freight ; if there are three
boxes billed and it turns out two boxes, it will be termed one
box short.

Q. This compensation per mile for running these cars of
1^ cents mentioned in the contract Exhibit No. 3, of this date,

262

is that the rate now ? A. It has been reduced by agreement
from 1^ cents per mile to | of a cent per mile.

Q. I want to call your attention now to a clause in Esliibit
No. 8 (pointing oiit the clause in relation to compensation) ;
does that mean all goods shipped by special rate ? A. No ;
we used to have a class called special class ; it ought more
properly to have been called fifth class.

Q. Then that "special class" really means nothing there ?
A. Not now ; that is, because there is no special class.

Q. The compensation remains 15 per cent, for the first
three classes and 5 per cent, for the fourth ? A. Yes, sir.

Q. And that covers the whole ? Yes, sir.

(The contract between the Canada Southern Eailroad and
the New York Central & Hudson Eiver Railroad and the
Boston & Albany Eailroad and other railroads received in
evidence and marked " Exhibit No. 4, June 16, 1876.")

By Mr. Sterne :

Q. When did the special rate to David Dows & Co. cease ?
A. I do not know that they have had any rates that other
people did not have ; we have not had any tariff in force for
four or five weeks previous to this meeting which you
refer to.

Q. But you had a tariff in force sometime or another ? A.
Yes, sir ; we had no special contract Avith David Dows.

Q. Never ? A. Well, hardly ever ; I suppose that is the
way you want me to answer that.

Q. I suppose " hardly ever " about expresses it ; don't you
know as a matter of fact that special rates have been named to
David Dows & Co., or that they have had special rates which
other houses have not? A. They may have at times had
them ; that is to say, they may have had a special rate guar-
anteeing to ship, we will say, a million bushels within a given
time, which rate would have been given to any one else making
the same proposition.

Q. Is there any way in which you advertise or make known
to the world that any one who ships a million bushels within
a given time gets a special rate from you ? A. I think not.

Q. And that special rate, as to their million bushels, if you

263

please, subsisted how long, and when did it cease ? A. I am
not spealiing of any one particular case.

Q. You had it in mind or you would not have spoken of a
million bushels if you had not some case ? A. That might
have been five years ago ; I only used it as an illustration.

Q. It might have been two years ago, mightn't it ? A. It
might have been two years ago ; I thiuk, as a matter of fact —
if you want to know the fact — I think there was an arrange-
ment made with them prior to the recent agreement to restore
and maintain rates, for 500 car loads.

Q. At special rates ? A. At the rate that was in force then ;
it was not a special rate ; it nas an open rate to everybody ;
but they wanted a specific quantity named at which we would
carry at that rate, and we did; and I do not think they have
all been shipped yet ; that one is undoubtedly in force ; I can-
not tell, though ; I do not know whether it is or not.

Q. That would be in conformity with your arrangement with
the railways that j^ou have just been speaking of ? A. It would,
of course.

Q. And the arrangement which you have made would make
the general rate to the rest of the public higher than that
special rate to David Dows & Co. ? A. David Dows & Co.

Q. You are not answering mj- questii.)n ? A. I won't answer
it except in my own way ; excuse uie, I loust answer it so I
can understand what I am talking about ; the grain would have
all been shipped in one day if we had had the cars to move it
in ; the gTain was bought and read^ to ship when we were
ready to furnish the cars ; if we had more business offering to
us than we had cars for then Mr. Dows had to wait.

Q. As a matter of fact the grain which runs over your road
in cars furnished by your road and consigned to David Dows
runs over your road at rates lower than that which the general
public gets now ? A. I do not say that.

Q. Isn't that the tact ? A. No, it is not.

Q. What is the rate to the general public? A. What on?

Q. Grain. A. Where from ?

Q. Chicago. A. Fifteen cents a hundred.

Q. That is now ? A. Yes, sir.

Q. What is that special rate to David Dows ? A.I decline
to answer ; I understood those matters were not to be made
public ; if the Committee want me to answer, and direct me

'264

to, I will, but I do not think it is right that I should be obliged
to do it.

Mr. Depew — The rate that David Dows got on that par-
ticular day the whole world had.

Tbe Witness — ihe whole world could have had it.

The Chaibman — The testimony discloses the fact that he had
the open rate at that time.

The Witness — Do you direct me to answer, Mr. Chairman ; T
do not waot to answer that kind of question ; so far as this
one question is concerned, I dou't care — but I would object to
exposing our business to our competitors, or exposing our
patrons' business to their competitors ; this one question I
have not the shghtest objection to answering, except as it
might bear upon others.

The Chaikman^You stated that it was an open rate ; I
cannot see any objection to your answering the question.

The Witness — I will state that rate if you direct me to do it.

The Chairman — We so rule.

The Witness— That I shall?

The Chairman — Yes.

A. Twelve and a half cents.

Q. Where is there a schedule showing the rate to the whole
world to be twelve and a half cents per hundred from Chicago
to New York at the time you made the contract with David
Dows & Co. to carry five hundred cars ? A. I do not know as
there is one.

Q. When was that rate made '? A. I could not tell you
exactly ; I should say the latter part of May.

Q. This year ? A. Yes, sir.

Q. Is that a rate for through shipments to Liverpool ? A.
No ; the rate for shipment to New York.

Q. Have they also a rate for through shipment to Liverpool?
A. They have got no special rate that I am aware of.

Q. Don't you give them a special rate from Chicago to Liv-
erpool, so that they can have the advantage of breaking bulk
at New York, at the through rate from Chicago to Liverpool ?
A. Now ; I propose to be technical in answering that, Mr.
Sterne, by saying that I do not give rates at all eastbound ; I
never made a dozen eastbound rates in my lite.

Q. But they are given with your consent ; I appreciate your
technicality, and it arises, doesn't it, from the fact that you

265

consider yourself in honor bound to those people who get
special rates not to reveal it ? A. Yes, sir, partially so.

Q. And you consider the people to whom you give those
special rates ia honor bound not to leveal it to the world ?
A. I did not understand you ; I do not know that I am bound
to keep the rate to myself that I make with homebody unless
I choose, but I would consider that they were bound to keep
it to themselves if T made a rate with them.

Q. You do bind them to secrecy, don't 3-ou, in someway;
that is an understood thing between you and them, that they
are not to reveal it ? A.I do not know as, in the few instances
that I have made any arrangements of that kind, that I par-
ticularly bound them to secrecy, but it would be an understand-
ing of that kind, of course.

Q. What would you do with them if you found them farming
out the rate ? A. Stop it.

Q. Suppose 20 people were to combine under David Dow's
rate in Chicago, and were to ship to you the 500 car loads of
grain, what would you do with David Dows & (Jo '? A. What
could I do with them ; I could not hang them or shoot them.

Q. But you would consider they had broken faith with you,
and you would refuse to make any special rate thereafter,
would you '^ A. No ; I would not.
Q. You would not ? A. No.

Q. You would not consider it a breach of faith ? A. No.
Q. So you allow people to whom you name special rates to
farm out their special rates if they see tit ? A.I did not say
that.

Q. Do you ; you say you would do nothing to them, and you
do not consider it a breach of faith, and you would not refuse
them a special rate afterwnrds? A. David Dows & Co., and
all that kind of people in the same kind of business, their busi-
ness is to receive shipments from other people ; if the rate was
made with David Dows & Co., it would be for such goods as
he had shipped to him, unless it was specified to the contrary.
Q. No matter from whom it was ? A. Yes, sir.
Q. Suppose he were to farm out to a half dozen other houses
his special rates, would you then consider that a breach of
faith ? A. I never heard of such a thing ; I never formed an
opinion on it ; it will be only a matter of opinion ; I never
knew of such a case.
22

266

Q. There would be a profit to David Dews & Co.— if they
did not get for instance, the five hundred car loads of freight
for themselves, if they did not want to— to have somebody
else ship their freight under that contract, and take one-half
the profit to themselves of the difference between the schedule
rate and your special rate, wouldn't there ? A. I could not
tell you.

Q. You could not tell whether there would or not ? A. I
do not know anything about theii business.

Q. Have you a special rate with Jesse Hoyt & Co. ? A.
Not that I am aware of.

Q. Had you within any recent period of time ? A. Not
that I know of.

Q. Had you within two years ? A. Not that I know of.

Q. Had you within three ? A. Not that I know of.

Q. Had you within five ? A. I do not remember.

Q. The books which name the special rates would disclose
that fact, wouldn't they ? A. No ; it would not be in the
books to name it and show it.

Q. How could this Committee, be informed of your special
rates with these various large houses on through shipments?
A. I think it would be very difficult to get that information
from any records.

Q. How as to the contract with Jesse Hoyt & Co. ? A.
"VVe have no contract with Jesse Hoyt & Co.

Q. Haven't had for five years ? A. Not to my recollection.

Q. And no special rate ? A. No other special rate than just
such as I have testified to.

By Mr. Husted :

Q. What would you call thoMe — specific? A. Just as Mr.
Depew explains ; the rate to-day we will say is twelve and a
half cents a hundred, and a man asks us to take one thousand
car loads for him, he agreeing to pay twelve and a half cents,
we agreeing to take it at twelve and a half cents ; neither that
man nor ourselves control these rates ; they are controlled by
competition ; he takes the chance of the rate goin'j; down, we
take the chance of its going up ; we agree to carry this specific
quantity; I m ould not term it a special rate; it is the rate
which rules the day we make the agreement.

2fi7

By the ChaiEMAn :

Q. Do you agree to cai-ry it at that day, that present time ?
A. We agree to carry that quantity ; it is what is technically
known among freight agents ; as a " block " a block of grain,
a block of one thousand cars, or five hundred cars, or whatever
may be agreed upon.

By Mr. Bakee :

Q. TVitbin what time ? A. The rule is that they are to ship
as fast as the road can furnish the cars.

Q. No specific number of cars per day ? A. No.

By the Chaieman :

Q. It might be two or- three months ? A. I say^I am now
speaking of our western connections who make this arrange-
ment— if they made an arrangement with a man for 500 cars
of grain at a rate, and they had the 500 cars there, they would
expect him to load them that day, if it were a possible thing to
do it.

Q. Then the company could shorten the contract by fur-
nishing the cars ? A. Yes, sir ; if it is possible to furnish the
cars.

By Mr. Bakee :

Q. But in making the contract there was no time specified
in which it should be fulfilled ? A. I am not speaking of any
particular contract.

By Mr. Husted :

Q. The company would be bound to furnish the cars as
quick as they could, and the party would be bound to furnish
the grain as fast as he could ? A. Yes, sir.

Q. Without any specific time? A. Without any specific
time.

By Mr. Depew :

Q. The freight is supposed to be ready? A. That is the
theory; if a man wants to ship 500 car loads or 1,000 car loads,
we suppose that he has got it to ship.

268

By Mr. Baker :

Q. He could take the whole season to sMp it if he desired ?
A. Oh, no ; he must bring it just as quick as the cars are
furnished.

By Mr. Stebne :

Q. Suppose you have got the cars, and the man is not
ready with his shipment, what do you do? A. We don't do
anything so far as he is concerned, or it is concerned.

Q. You wait until he is ready ? A. No ; we do something
else with the cars.

Q. I don't mean whether they wait ; I mean the corporation
waits ; I do not mean the cars wait, of course not ? A. No ;
if the agreement is made with a man to ship a quantity of
freight, and he has not got it to ship, that is the end of it.

By the Chairman :

Q. That is the end of the agreement, you mean? A. That
is the end of the agreement ; there may be a case, of course,
where a man would say : " I expect to buy a thousand car
loads to-morrow ; what will you take it at ?" and we have
to make him a rate.

By Mr. Bakee :

Q. But they make a new contract at that time? A. But if a
man says " I have got 500 car loads," and we have got the 500
cars to give him, and then he has not got what he said he
hail, why he has broken his agreement.

By Mr. Depew :

Q. If the rate goes down to the general public that is a mis-
fortune of the shipper who made the contract that day if it
goes down the next ? A. We should consider it so ; yes, sir.

By Mr. Stekne :

Q. When you speak of the general open rate you mean that
was the cut rate on that day ? A. I mean by an open rate a
rate that if you step into any freight office and ask what the
rate is, they would give you that rate — tell you what it was.

269

Q. By an agreement between the roads ? A. I was explain-
ing what I mean by an open rate — a rate that everybody can
have.

Q. How does it come that all of the roads, all the compet-
itors in Chicago, without any arrangement or agreement be-
tween the various railway companies, have a general rate be-
tween them ? A. I do not know what you mean by that
question.

Q. At the time that David Dows & Co. had that rate given
them of Vil cents a hundred, from Chicago to New York, was
there an arrangement subsisting between the various trunk
lines, by which the rate was made uniform, from Chicago to
New York, in that time? A. No, there was not.

Q. How came it then to be uniform ; all the rates uniform,
unless there is such an agreement ? A. I do not say it was
uniform.

Q. Didn't you just say to the Committee, if he had gone
into any freight office in Chicago, he would have had that rate
given him ? A. I said an open rate was one which, if any per-
son went into a freight office he could get it ; now a hundred
men might go into one freight office and be told that the rate
was 12J cents, and the same hundred, or another hiindred,
might go into another freight office and be told that the rate
was 10 cents ; if there was no agi'eement, no established rate,
each road would be doing what it thought best and thought
proper.

Q. That was given at a time when each road did what it
thought best ? A. Yes, sir.

Q. Was the rate of 12J cents then, your rate from Chicago
to New York, to the general public on grain — to everybody?
A. 12 J cents ; yes, sir.

Q. No matter how much was shipped ? A. No matter hpw
much was shipped.

Q. One car load or 100? A. Yes, sir ; one car load or 100.

Q. Then your rates do not vary with the quanity of the ship-
ment ? A. They do, sometimes ; when we vary the rates we
are governed by that.

Q. How does it come that at that time it did not vary with
the quantity of the shipment? A. I could not tell you that ; I
did not make the rates.

Q. Does it pay you a profit to haul from Chicago to New

270

York, grain at 12J cents a hundred in bulk ? A. I should say
it did not.

(The witness produces certain papers.)

The Witness — Here are the rest of those tariffs I was to
bring.

Q. Are those the manuscript tarifis ? A. They aie; they are
the only record we have got, and if the Committee must take
them, I will have to ask the privilege of taking them away
to have them copied.

Mr. Sterne — Take them of course.

The Chairman — What are they, Mr. Rutter ?

The Witness — Manuscript tariffs.

The Chairman — Memorandum of special rates ?

The Witness — No ; tariffs, manuscript tariffs.

By Mr. Sterne :

Q. At what rate must you carry pe)' hundred from Chicago
to New York to yield a profit , on the transportation ? A. I
have told you before that it is a very difficult thing for any one
to answer that ; it will depend entirely upon the quantity.

Q. You have maae up your mind that twelve and a half cents
results in a loss ; at what point do joa make up your mind that
some other rate results in a profit ? A. Twelve and a half
cents would not be a loss if it was a question for us to decide
whether we would carry it or let it alone ; we had better carry
it at twelve and a half cents than to have our road lying idle.

Q. Then twelve and a half cents pays a profit on the mere
cost of transportation, leaving your capital account and your
loan account out of the consideration ? A I do not say that,
either ; I do not propose to enter into that question if I can
help it.

Q. I want an opinion from you ; you are the Geneial Traffic
Manager ? A. I do not propose to give anything like expert
testimony.

Q. But you are an expert? A. No ; I am not, and I am not
giving expert testimony.

Q. I cannot for a moment believe that Mr. Vanderbilt would
put anybody in the responsible position that you hold without
your being an expert ? A. I did not suppose I came here to

271

testify as an expert ; I came here to testify as to facts, as far
as I conld.

Q. I think, as Traffic Manager, the Committee ought to have
the benefit of your traffic expert knowledge ; no man is better
qualified tlian you for it, I think ? A. You are very kind, Mr.
Sterne, but T do not acknowledge tliat I am an expert ; I cannot
give expert testimony, aud I don't undertake to do it.

Q. T\'hat rate, think you, pays your road to carry goods
from New York to Chicago, westward bound— would 12^
cents a hundred pay you ? A. I do not think it would.

Q. Don't you run a good many cars westbound empty, and
would not 1'2J cents. p;iy you to have Ihem filled so that you
need not run them back empty ? A. I do not think we take
to the terminus of our road very ma,nj empty cars.

Q. That is because you leave them at Albany ? A. No ;
becaiise we find loads for them along the line, except the cars
that I have mentioned — cattle cars, oil cars, oil tanks, hog cars,
and lumber cars, perhaps.

By Mr. Shipman :

Q. For instance, if you send a train of cars from New York
empty, bound for Chicago, they would pick up a load on the
way ? A. Yes, sir; failing to get anything else, would get coal.

By Mr. Sterne :

Q. What rate, think you — I must go back to the point —
would pay } ou From the west, say Chicago to New York, per
hundred pounds ? A. I do not believe I can answer your
question.

Q. Is it because you cannot, or you don't want to? A. No ;
because I cannot answer it accurately.

Q. I do not want it with any fractional accuracy ; I want it
approximate!}', for the inl'ormation of the Committee.

The CiiAiKMAK — You mean, of course, the minimum price?

Mr. Stekne— The minimum price at which a profit is yielded
to the road for the haul.

Mr. Depew — Do you mean the actual cost of the haul?

Mr. Stekne — No ; he has already told us that he cannot tell
us anything about that ; what I want from Mr. Rutter is — I
asked him whether 12^ cents, paid him for carrying David

272

Dows & Co.'s grain from Chicago to New York, and he said
he thought it did not ; now, I want to know from him at what
rate he thinks the compan}' carries, at a profit, from Chicago
to New York.

The Witness— I presume if we— I am not going, to answer
you accurately ; I told you I could not do it — if we .could get
an average of fifty centsi a hundred, tbat there would be a
fair profit in it.

By Mr. Husted :

Q. For all Linds of goods? A. Everything, an average of
fifty cents.

By Mr. Steene :

Q. An average of fifty cents a hundred? A. Yes, sir.

Q. What proportion of your traffic from Chicago to New
York is fourth class, compared with every other cltiss? A.
Quite a large proportion of it.

Q. Isn't it more than seven- eights of it? A. I would not
undertake to say ; it is a very large proportion, but then we
do have a great deal of other business ; I should only be guess-
ing if I answered you.

Q. I want your guess, because your guess is better than
mine ? A. If the Committee ask me to guess I will give them
a guess.

The Chairman — You say you don't know.

The Witness — I don't know.

The Chaiisman — That covers the question.

Mr. Bakek — If the witness does not know exactly he may
have some opinion.

Mr. Steene — He is an expert; his opinion is valuable to us,
it seems to me.

The Witness — I am not an expert.

The Chaieman — Your experience as Manager of the road
ought to enable you to form an opinion ; if it does not, of
course, we do not ask you to give it.

The Witness — I should only be guessing if I answered it.

Mr. Bakek — Your guessing, Mr. Kutter, is based upon
knowledge and actual experience in managing the whole busi-
ness ; it certainly must be of some value.

273

The Witness — Well, I should say, probably 75 to 80 per
cent., and the rest would be composed of live stock and high
class freight.

By Mr. Sterne :

Q. Then to make an average of fifty cents, a hundred you
would have to charge that fifty cents, a hundred — almost fifty
cents, a hundred — on your iouith class freight, wouldn't you?
A. I thought you were going to lead up to something of that
kind, and that is the reason I declined to give anything like
expert testimony ; I don't consider myself an expert, and I
don't know that I am bound to give that kind of testimony ;
I am willinj; to give the Committee any information that I have
got, that I can give positively, but I am not going to make
guesses here, for I don't propose to mislead you.

Q. Is there anybody in your office — I mean in the office of
the New York Central & Hudson River Railroad — more ex-
pert than yourself on the question of the traffic arrangements
of your road ? A. I am sure I could not answer that.

Q. Are you not placed in the responsible position of Traffic
Manager, by reason of your knowledge of these matters ; if
that is not the reason, what is ? A. I don't know what I ana
placed there for, in the light in which you ask the question.

Q. And so, if Mr. Vanderbilt were to ask the question that
I have just put to you, '• Mr. Rutter, I want to know at what
rate I, as the largest stockholder in this road, and its Presi-
dent, can afford to carry traffic from Chicago to New York, at
what point it begins to pay me to carry and at what point I
lose money on it," you would have to answer him as you do
me — that you don't know anything about it, and that you have
no means of information ? A. Yes, sir ; I would have to
answer him that way, if he wanted a positive answer.

Q. And you would not even venture to give him a guess, so
as to enable him to know something about the management of
that great property ? A. I think I should endeavor to give
him the best information that I could obtain on the subject.

Q. Now. can yon obtain the information that I ask for this
Cominittee, so as to let the Committee know at what rate it is
not profitable lor you to carry traffic from Chicago to New
York, fourth class, and at what rate it is? A. I don't believe
I can ; we must take our business as a whole.
23

274

Q. When, durint^ your administration of the office of Traffic
Manager of the Xew York Central & Hudson Eiver Eail-
road, was the rate to hirge sljippers on fourth chiss freight
above fort^- cents, a hnudred? A. In ISl'i it wus.

Q. How long was it that rate ? A. With the exception of,
probably, three ov four days, it was above forty cents, during
the whole year.

Q. In 1873 how was it? A. I don't remember so well ..bout
1873, but I think the rate kept above forty cents, in 1873.

Q. How was it iu 1874: ? A. I am talking uf the minimum
^the lowest rate that was made, not the average rate.

Q. The average rate I mean? A. I am not speaking of the
average ; I am speaking of that wliich was the lowest rate
during the year ; I e-.iu testify that the average rates, I am
quite coufideut, during 187"2 and 1873 were more than forty
cents., either to large or small or medium shippers.

Q. In 18 .'4 and 1875 it was below forty cents., wasn't it ? A.
I don't remember.

Q. Do these schedules tell you anything about it ? A. No.

Q. Why not ? A. Those are westbound ; I thought you
were talkiug about eastbound.

Q. I am talking about eastbound ? A. Those are westbound
tariffs.

Q. Was not, as matter of fact, the rate below forty cents.
during 1871, '75, '76 and '77, to large shippers ? A. They were
in 187(3.

Q. Weren't they in 1877 ? A. The ayeiage rates you are
talking about ?

Q Yes. A. I don't remember.

Q. AVhenever they were below forty cents a hundred your
company was doing its through business at a loss, was it? A.
I have not said that.

Q. According to your guess, isn't that a fair inference?
A. No.

Q. Would not that be your inference ? A. No.

Q. Then do, pray, explain to me what you meant by saying
that fifty cents, aver.ige would pay for carrying freight from
Chicago to New York ? A. I said it would pay a profit in my
opinion.

Q. The Chairman suggests that you should confine your
guess in that respect to :i m nimum profit ; forty cents a hun-

275

dred, on seven-eigbths of your traffio, would pay a loss, wouldn't
it ? A. I don't say so.

Q. Then your guess that fifty cents, would pay a profit was
not confined to the idea of a minimum profit ? A. I said that
in my opinion it would pay a profit.

Q. So woiild $2 a hundred pay a profit '? A. Exactly ; so
would $4.

Q. Now, wdiat point is there at which there would be a mini-
mum profit ? A. I would not undertake to say ; there are
too many things to enter into the question ; it depends en-
tirely on how much business we do, and what it costs to do it.

Q. Let us take the other end of it ; you guessed that twelve
and a half cents would bring a loss ; how much loss w^ould
twelve and a half cents bring? A. I woidd not undertake to
say ; I qualified that answer also, you remember.

Q. Had you special rates within the last three years, or any
special rate for any special shipment within, the last three
years, to Armour, Pluukington & Co. ? A. I have told you I
did not make the rates ; therefore I cannot testify upon that
point.

Q. You have also stated that they would not appear upon
your books ? A. Yes.

Q. How could this Committee get the information as to
special rates, or special terms, for special shipments, within the
last three years, to the various houses of David Dows & Co.,
Jesse Hoyt & Co., Armour, Plankington it ( o.. Sawyer, Wal-
lace & Co., Hughes, Hickox & Co., Mas Oppeuheim & Co.,
Herrman Stultzer, Fowler Brothers, E. A. Kent & Co., Samuel
Dalley, Wilcox & Co., Watts, Parkei- & Co., and Stephen Post 1
A. Where from ?

Q. From the west — western points ? A. From all western
points ?

Q. All western points to New York ? A. I suppose if they
were to go to those western points they might find some record
of the rates that were made.

Q. Do you keep copies of freight bills that you issue here at
eastern points to collect the freight ? A. Yes, sir.

Q. Would not those freight bills tell us ? A. Not always,
if there was a special rate or a contract.

Q. Why ; would the general rate be charged and the special

276

rate make its appearauce in the slicape of a rebate or draw-
back ? A. Yes, sir ; probably.

Q. Then your system is to charge the general rate and
make a rebate or drawback ? A. Not always.

Q. But that is one of the ways in which the special rate
appears? A. We leave that matter with our western con-
nections to fix.

Q. I know, but isn't it fixed in your department ? A. If we
share in anything of that kind our treasury is pretty apt to
ieel it.

Q. Isn't it fised by the rebate or drawback being made by
your company ; the rate, as I uuderstand^f I am wrong you
will correct me — is certified to your company, the bill is made
out at the general public rate, and a drawback or rebate is
made representing a special rate? A. Yes, sii:; sometimes;
not always.

Q. And that would be given in the shape of a check? A.
Yes, sir.

Q. And that check comes from your company? A. If we
settle it, it does ; yes, sir.

Q. Don't you settle the New York freight on east bound
shipments ? A. Not all.

Q. Well, some of it ; a great majority. For instance, to come
back to a concrete case ; five hundred car loads of grain are
shi]iped to Sawyer, Wallace & Co. ; the rate is fixed by a western
company at Chicago ; the bill is made out by you here, isn't
it — if the goods come here ? A. Not always ; do you mean
the freight bill that we collect from them on ?

Q. Yes ? A. Yes, sir.

Q. Made out by you here ? A. Yes, sir.

Q. This, however, is made under a special rate ; the freight
bill is then made out under the general rate, isn't it ? A.
That depends upon circumstances.

Q. Sometimes the freight bill is made out at the general
rate ? A. Yes ; sometimes.

Q. And then they come with their special arrangement ask-
ing for a rebate or drawback ; now, to what company do they
come for the purpose of getting that rebate or drawback — to
your company or to the western company, the goods being
delivered here and the bill being made out here ? A. Mostlv

277

to the western company ; mostly to the company who made
the arrangement.

Q. When do they come to your company? A. They come
to our company when under an arrangement we are notified,
and asked to pay it.

Q. In how many instances does that occur? A. I couldn't
tell you that.

Q. How long is it that that system has subsisted, and when,
if at all, has it been done away with ? A. It has subsisted for
a long time.

Q. Longer than you have been in the office ? A. Yes, sir.

Q. You found that condition of affairs there continuously ;
is it now broken up ? A. The system of our paying over-
charges or rebates ?

Q. Not overcharges ; rebates or drawbacks from schedule
charges ? A. No ; it is not broken up ; it is the same as it
has always been.

Q. What book or books in your office, under your control,
will show those rebates, drawbacks, and payments of money ?
A. We have a record of all vnichers that we pay.

Q. Have jou. also a record of the terms, circumstances, and
claims made which result in that voucher ? A. We either have
a record or we have the papers on file.

Q. The arrangement with some of the houses, or all of them,
which I liave named, partook at times of that character, didn't
it, that the schedule or regular rate was charged, and by a
special arrangement a rebate or drawback was allowed from
tliat general schedule rate ? A. Those things have been done.

Q. It has been done within three years last past, hasn't it ?
A. Yvs, sir ; it has.

Q. Now, where are those records of those special rebates
and drawbacks given under such circumstances as I have
named, and can you produce them for the benefit of this Com-
mittee ? A. I can produce our voucher books ; I don't under-
take to say now what they will show.

Q. The voucher book is a mere sttib, isn't it — check book ?
A. Oh, no ; you understand that no money is paid through my
department ; the voucheis and accounts are made up, and we
keep a record of all those vouchers.

Q. How much of a book is the voucher book for the past two
years ? A. I don't know as I have seen it for years ; it is kept

278

in tlie office ; it is uot so large tliat it could not be brought
here.

Q. Would the voucher book for the past three jears, say, be
a guide as to these transactions that we Lave just now spoken
of ? A. I think it would ; yes.

Mr. Sterne — Does the Committee want that voucher book?

The Chaiuman — Yes, if it contain informacion. (To the wit-
ness) : Tou will produce those books, will you, if they contain
it, or you will get the information ?

The Witness — I will.

Q. Have any arrangements, within the past few years, been
made, or special rates entered into, drawbacks or rebates
allowed by an understanding witli the houses of E. W. Cole-
man & Co., J. H. Herrick & Co., Patterson, Clapp & Co., Josiah
M. Fricke & Co., William Blauchard, and Porter & Wetmore
for western breadstuffs? A. I don't remember whether any
special rates have been made with them or not ; I presume
likely there have.

Q. Would there if there had been any such made ; would
their rates or their drawbacks and rebates appear upon the
book which you have been asked to produce here ? A. If we
paid it, it would ; yes, sir.

Q. If you paid the drawback or rebate it would appear ? A.
Yes, sir.

Q. Would anything more appear than the mere drawback
and rebate that you paid ; would tlie agreement apjjear by
which the drawback and rebate had been made ? A. I don't
believe it would.

Q. Where would that be found ? A. If auy record was kept
of it, it would be found in the west, where it was made.

Q. When you come to settle with the r<ailway company that
prorates with you upon that particular transaction, how do
you justify the payment that you have made by way of rebate
or drawback ? A. Well, the voucher would show the reason
why it was paid in some general way.

Q. Then it is necessary to look at the voucher, itself ? A.
Or a copy of it, which our books will show ; we propose to
bring you books which will show you all there is of it.

Q. The whole transaction ? A. They will be fac-similes of
the vouchers.

Q. Will it be information to this Committee as to the whole

279

transaction? A. Well, I think so; I don't know how mncli
iiifoimatiou they want, but I think it will give them all they
want, and if it don't — if there is anything else they want, and
we can get it, we will produce it.

Q. Now, in relation to provitsions, have there or have there
not been eastward bound special rates and drawbacks, or
drawbacks and rebates paid or special rates made to these
houses ; to Ward, Foster & Co. ? Eossiter, Skidmore & Co. ?
MoDples & Shaw ? Stevens & Benedict? A. I do not remember
any of those named ; we are in connecfion with our connecting
railroads in the west, competing with the Pennsylvania, the
Baltimore and Ohio, the Grand Trunk, the Lakes, St. Lawrence
River and Erie Canal ; for all our bvisiuess that we do ; and
I have no doubt tliat, at various times, rates different fiom
the schedule have bten made ; I say I have no doubt, in fact,
I know they have been, and they have been made to meet the
competition.

Q. With special individuals they have been made ?

Ml. LooHis — What do you mean bj- special individuals?

Q. Certain individual houses? A. Our rates are open to
everybody ; if we make it with one, we make it with another ;
so far as any control we have over them.

Q. Do you mean the committee to understand that on the day,
for instance, that you paid over a check in the way of rebate or
drawback, to, say, E. W. Coleman & Co. — I use them as an
illustration— that you equally paid back the rebate and draw-
back to every shipper over your line on the same day ? A. If it
had been agreed to do so ; if the shipper had asked for it, he
waiuld liave got it beyond a doubt.

Q. If to-day a shipper who shipped over your line on that
day when you paid over a check by way of rebate or drawback,
who paid you the schedule rate would .call upon you person-
allyfor the purpose of getting his voucher and g'tting his draw-
back or rebate, would you give it to him ? A. If it had been
agreed that he should have one, cei taiuly.

Q. Not otherwise? A. If it had been agreed he should have
one, and I had agreed on the part of the company I represent
to pay it, to furnish the money, it would be done.

Q. But unles-i such agreement had been made at the time
in relation to that special shipment, you would not consider
yourself obliged to do so? A. Certainly not ; there may have

280

been four or five rates per day upon the same kinds of property
going from the same point to the i.ame destination ; it varies
just exactly as the market on grain or pork will vary.

Q. Indeed, your freight rates vary just as much as the stock
market varies ? A. They do when there is nothing positive said
to the contrary ; excuse me, if you please ; I had not finished ;
we may at ten o'clock in the morning have a hundred cars at a
given point and we want to load those hundred ca,rs — 1 am now
talking about time when I may term the rates are unsteady ; no
agreement.

By Mr. Hepbuhn :

Q. Railroad war ? A. If you choose to put it so ; at ten
o'clock we may have a hundred cars, and our rate may be a
certain figure ; at twelve o'clock the trains come in and bring
in two hundred cars, aud we are in the market to load those
cars, and the rates will vary except at such times as I say there
is a positive agreement that holds them to a fixed figure.

By Mr. Stebne :

Q. Now, into what sort of schedule if any, printed, manuscript,
or in any other form, do those varying rates enter so that hhe
public may have notice of tliem ? A. When the rates are as I
term unsteady there are no schedules of them made ; they
vary ; you could not make schedules ; it would be impossible ;
it would keep them busy making schedules and doing nothing
else.

Q. During what portion of the time are those rates so un-
steady ? A. I am sorry to say it has beeu a very large propor-
tion of the time during the last year.

Q. The past five years a greater part of the time, hasn't it?
A. Yes, sir.

Q. Take a given case at Chicago; when the rates are un-
steady, and you name a rate, say 12J cents a hundred, what
possible object is there in giving a rebate if that is the public
rate — or drawback ? A. Well, there is no object.

Q. Then the cases when you give rebates and drawbacks
are cases, are they not where you have a variation from the
public rate? A. Yes, sir.

Q. Is the term cut rate the same as the special rate ; is

281

that what is meant by cut rate ? A. Yes, sir ; I suppose so ;
jes, sir.

Q. A cut rate distinguislies itself from the general rate in
this, that it is a cut under the general rate, isn't it '} A. Yes,
sir ; oh, I don't know that [ answered you properly ; a special
rate might not be a cut rate ; it might be a variation from the
tariff for some special reason, and if it was agreed to by all
parties it crmld not be cilled ;i. cut rate ; tlieve would be a dif-
ferece between a cut rate and the special rate.

Q. What is the distinction between the cut rate and special
rate ? A. The cut rate is what you termed it yourself ; it is a
cut under the general rate.

Q. And it is a cut under the agreed rate on other railways ?
A. That is it exactly.

Q. Is it not the distinction that the cut rate is lower than
the agreed rate with the other railways, and a special rate is a
rate made to a special shipper, with which the other railways
have no concern, because you have made no agreement with
the other railways ? A. No; not exactly.

Q. If that is not it, what is it ? A. A special rate might be a
rate made for everybody, but a variation from the tariff, and a
cut rate would be a variation from the tariff, with tlie breaking
of an agreement with other railways.

Q. You have agreements subsisting now with other railway
companies on westwai'd bound freight, have you not ? A.
Yes, sir.

Q. How long have they been in existence, and who are the
parties to that agreement ? A. About two years ; the Balti-
more & Ohio, Pennsylvania, Erie, and New York Central.

Q. G-rand Trunk is not in that agreement? A. The Grand
Trunk is now in an agreement from Boston, but not from New
York.

Q. How long is it since the Grand Trunk has been a party
to the agreement ? A. From New York ?

Q. From Boston— from anywhere ? A. I don't remember ;
about a year, I think.

Q. How long is it since these freight agreements have been
in existence ? A. What freight agreement do you refer to

now ?
Q. 1 mean the agreement between the various companies on

282

westward bound freight? A. About two years, from New
York.

Q. Prior to that time there had existed what are called
freight arrangements, between them ? A. Agreements to main-
tain rates.

Q. Which Ton didn't succeed in maintaining? A. Not al-
ways ; did, sometimes.

Q. What effect had those agreeineats as compared with the
agreements that have taken the place of the old kiod of agree-
ments ; do you understand my question ? A. No ; I do not.

Q. What effect in maintaining rates had the old form of
agreements ; the agreements to maintain rates ? A. They had
the effect to maintain them for the time being.

Q. To retain them? A. I should use the term, restore
them.

Q. Restore them to what standard- — a paying standard ? A.
Restore them to the tariff which had been in force.

Q. How long would they, as a general rule, exist? A. Oh,
I don't remember that.

Q. A change was made a few yeai s ago, was there not, as to
the nature of those agreements? A. A change was made
about two years ago.

Q. Will you explain to the Committee, please, that change ?
A. We formed a pool.

Q. Explain what the pool is, please ? A. Divided the busi-
ness ; each agreed to take a certain proportion of the traiEc,
and take means to see that each one got its proportion.

By the Chaieman :

Q. Explain the whole agreement fully from the beginning ;
its operation and effect? A. I had rather bring the agreement
here, Mr. Chairman, than to undertake to explain a thing that
I have not looked at perhaps for two years.

Q. Very well ? A. I will produce the agreement.

By Mr. Steene :

Q. Under that agreement, Mr. Albert Fink is the Com-
missioner? A. Yes, sir.

Q. And he practically is the superior freight agent over all
the freight agents or traffic managers of all the roads ? A. No ;
he is not.

283

Q. What is his special function as Commissioner ? A. Jt is
to keep the accounts and show to each company what it and
the other companies have carried, and to direct the manner in
which the equalization shall take place ; he works entirely un-
der the direction, however, of a committee called the executive
committee.

Q. Isn't that the committee of arbitration '? A. No.

Q. Executive committee of railway presidents ? A. The ex-
ecutive committee of the four trunk lines.

Q. How is that executive committee formed ? A. Formed
of the Vice-Presidents of the Baltimore & Ohio and Pennsyl-
vania Railway, and the Assistant President of the Erie, and
the Traffic Manager of the New York Central.

Q. That is yourself? A. Yes, sir.

Q. When you enter into such an arrangement, on what basis
does your corporation, the one that you represent, get its pro-
portion of the traffic ? A. It was arrived at l)y agreement ; we
had nothing to guide us ; we had no statistics to guide us, and
we simply made an arbitrary agreement between ourselves.

Q. Were you not required to satisfy the otiier railway cor-
porations in some one way or another, as to the basis upon
which you made your claim tor a larger proportion of that di-
vision of through traffic than the others had ? A. We did not
at first, get a larger proportion, except so far as the Baltimore
& Ohio was concerned.

Q. What proportion did you get? A. We got about one-
third.

Q. One-third of the whole ? A. Yes, sir.

Q. And the whole represented the business of four corpora-
tions? A. Yes, sir.

Q. Now, were you not required to show, as preliminary to
a consent on their part to such a division of the traffic with you
the basis for such a claim ? A. We did not show it.

Q. You did not give them any information, statistics, or
other means of knowledge, by which they could ascertain or
know that you did one-third of the through business ? A. We
did not show it.

Q. Did they show to you what proportion of the through
business they did ? A. No.

Q. So, in these discussions preliminary to the making of

•281

these arrangements, tlie amount of your traflBo was neither
asked nnr given ? A. No.

Q. It was guessed at, was it? A. I did not say it was
guessed at.

Q. Why did you get a third instead of a fifth ? A. Prac-
tically because there were three roads leading out of New
York.

Q. How is that? A. The Erie, the New York Central, and
Pennsylvania.

Q. The Baltimore A- Ohio was a party? A. The Penn-
sylvania and Baltimore it Ohio made their division between
themselves.

Q. How does it come that tke Baltimore it Ohio and the
Pennsylvania were willing to accept a third between them as
against a third for yourself alone ? A. I could not tell you
that.

Q, They did not give you any information upon which yon
could discover whether a third of the Baltimore it Ohio and
Pennsylvania was not an excessive amount compared with your
road ? A. No ; they did not.

A. And you acquiesced as to their proportion also upon a
guess as to their business? A. If you choose to put it that
way ycni may ; 1 do not admit we guessed at anything.

Q. If you did not guess at anything, how did you settle your
proportion ? A. Settled it by dividing by three ; recognizing
three lines as leading out of New York.

Q. You say, now you get a larger proportion ? A. We do
get a larger proportion now.

Q. Tell us the division now? A. They vary on the differ-
ent classes ; it is substantially thirty-five per cent. ; it is meant
to cover tliivty-five per cent.

Q. Thirty-five per cent, of the whole, although the Grand
Trunk has entered into it, from Boston ? A. That has nothing
to di) with Boston ; I am talking now about New York.

Q. Thirty-five per cent, of the whole, as against sixtv-five
to be divided between the Pennsjlvania, the Baltimore it
Ohio and the Erie? A. Yes, sir.

Q; Now, upon what basis was that division arrived at? A.
Well, I don't remember the reasons that were given ; we left it to
Mr. Fink to arbitrate between us ; we claimed we ought to have
forty per cent.

285

Q. Did yon claim you ought to have forty per cent, upon
the basis of your business ? A. Tes, sir ; after we knew the
proportion of business tliat we did, as compared with the other
roads from the reports, we claimed that we should have forty
per cent.

Q. Did not they want to know the proportion of business
that you did with the other roads ? A. They did know ; the
same as we knew.

Q. Do you know the proportion of the business of the
other roads ? A. After we made the agreement.

Q. When was that new division agreed upon ? A. I cannot
give you the date — say three or four months ago.

Q. Then three or four months ago you furnished Mr. Fink
with data A. No ; Mr. Fink had it himself.

Q. Didn't he get it from you? A. He got reports of our
daily business every day from us from each of the roads.

Q. Did that embrace through traffic only? A. Only
through traffic.

Q. Then there is data in existence which will tell us three
or four months ago what through traffic the New York Cen-
tral did ? A. From New York ?

Q. Yes, sir. A. Yes, sir.

Q. And then deducting that through traffic from the whole
bulk of the traffic of the New York Central ixom New York
and in New York, could not the committee arrive at some
conclusion as to what the whole of the traffic is and how
much is through and how much local ? A. Not from those
figures.

Q. Are those figures misleading? A. The business is
through westward, through eastward and local ; now they
can deduct from the total business what whs west bound, and
then they know what was local and through east, but they are
not separate.

Q. But there is a basis from those figures by which we can
arrive at a conclusion ? A. I think I have testified here to-day
to a willingness to produce any such information that we had.

Q. Will you kindly also then produce the figures which
were furnished, or copies of the figures which were furnished
to Mr. Fink for him to base that information upon ? A. Do
you mean the figures every day ?

Q. No ; you furnished Mr. Fink the figures upon which a

286

claim of forty per cent, was made by you of tlie other roads ?
A. We did uot furnish it to him ; he had it re9;ularly lor the
last two years.

Q. He has them collated and can probably give them to
us ? A. Yes, sir ; I guess I can give them to you, perhaps ;
I presume it is quite likely I can give you the figures when I
know just what you want ; I don't want to bring the whole
office down here, but I will bring anything we have got, if you
will let us know what it is, and if we have not got it, we will
try and find it for you.

By the Chaibman :

Q. You used the term New York in dividing the east bound
freight from Chicago ; I suppose this pool includes all the
freight to be sent, whether to Philadelphia or Baltimore or
New York ? A. I was talking of the pool from New York in
my testimony.

Q. For instance, your load gets what you call thirty-five per
cent, "of all the grain shipped from Chicago? A. Oh, no ;
only the westward bound freight ; freight going from New
York to Buffalo and points beyond Buffalo ; that is the only
point I have been testifying upon.

By Mr. Sterne :

Q. Those are through points you have been testifying from ?
A. Yes, sir.

Q. That is westward bound .'' A. Yes, sir.

Q. Now, take Boston pool ; is there a pool as to the Boston
traffic ? A. There is a pool between us and our connections and
the Grand Trunk from Boston to certain points in New England,
and there is au agreement by which a pool is formed between
all the roads, but the exact percentages have not been agreed
upon yet.

Q. That is in process of formation now, as to Boston west-
ward? A. Yes, sir.

Q. Now, the agreement between you and the Grand Trunk I
should like to have, as to Boston ? A. In reference to what ?

Q. Reference to westward bound freight? A. We merely
agree to make a division between ourselves.

Q. Didn't you agree to some rates ? A. Oh, yes, sir.

287

Q. We want a copy of the agreement between the Grand
Trunk Eailway ami your own corporation existing as to west-
ward bound traffic from Boston ? A. I have not a copy of
that agreement.

Q. Who would have a copy of that agreement ? A. When
that agreement was made, I was ill and was away, and it was
made while I was gone away, and I don't know who has got
the paper ; I think quite likely Mr. Fink has got it.

Q. Is he the custodian of all pooling agreements made be-
tween all the railways both from Philadelphia, Baltimore, New
York, and Boston? A. Yes, sir; I think he is; I think Mr.
Fink has that agreement ; T won't say positively what he has
got.

Q. Has Mr. Fink all these agreements — pooling arrange-
ments on westward bound freight from all the leadiug east-
ern states ? A. I think he has ; I think I am safe in saying
he has ; I rlon't like to testify to what somebody else lias got,
or what he knows, but I think he has all these pai ers.

Q. Have you agreements — pooling arrangemets, or whatever
you may choose to call them — between these various railways
running from Baltimore and Philadelphia as well as from New
York, with your road ? A. Yes, sir.

Q. lu all those arrangements and agreements you repre-
sented, except in the one instance where you were sick, the New
York Central Eailway in making them? A. I believe I have ;
I don't think of any that I have not been at that I did not
represent the road in.

Q. Now, the agreement as to pooling from Philadelphia
westward, who has that, and who makes the division of the
percentages ? A. That arrangement is similar to the one from
Boston ; the agreement has been made to do it, but the di-
visions have not been settled upon.

Q. The percentages? A. Yes, sir; that is in process of
working.

Q. Is that also true as to Baltimore? A. The same; yes,
sir.

Q. But, under that arrangement, you share in the business
that goes to and from PJiiladelphia, as well as the business
that goes to and from New York ? A. Yes, sir ; a small
share ; we do very little business at either of those places.

288

Q. Biit the extent of your proportion you share in ? A.
Tes, sir.

Q. You likewise share in such an arrangement or pool in the
business that goes to and from Baltimore to westward bound
points? A. We probably shall.

Q. That is also in process of formation ? A. Yes, sir.

Q. And does the Chesapeake and Ohio Company enter into
the one running from Baltimore ? A. They dp not.

Q. That is out of the pool ? A. Yes, sir.

Q. Now, taking the division of the percentages, what per-
centage do you divide with the Boston road to the Boston
point? A. I told you that had not been definitely settled.

Q. What proportion of the traffic that runs over the New
York Central Division of your railvs^ay to points outside of this
State comes from the New England States generally ? A. I
could not tell you that now.

Q. You can give the committee the information, can you?
A. I can.

Q. We want that; what proportion comes from Boston?
A. What proportion of the vi^hole of our business, or what
proportion compared with New York ?

Q. Compared witli New York. A. Well, I don't think I
can give you that ; I think I can tell you what the proportion
of the Boston is as compared with the whole business of New
York, Boston and principal New England points, but that
which goes over our road I could not tell you just at this
moment.

Q. You can tell what proportion comes from Boston, what
propovtion comes from the New England States, generally, of
the whole traffic that runs over the New York Central Division
of your railway ? A. Not at this moment ; I could not.

Q. The data, however, is in your possession, and you can
furnish it to the committee ? A. I think I can.

Q. Now, take the through rates from New York, westbound,
are they higher, as a rule, than the through rates from Chi-
cago eastbound ? A. Yes.

Q. What is the reason of that ? A. The goods are more
valuable and not as many of them.

Q. Is that the whole explanation ? A. I think that will
cover it.

Q. There not being so many of them makes your cars run

289

very largely empty, isn't that it ; I will make it easier for you;
you have already testified that about a third of your cars run
back empty ? A. I forget what I testified to as to the pro-
portion ; I don't think I was at all exact in it, and I said I
didn't know but that they hauled cars west from New York a
large portion of the year empty ; some portions of the year we
do not.

Q. You have testified that freight ofl"erina; at the West for
empty cais is taken at any price, rather t]ian to have those
cars come here empty ? A. I did not testify that.

Q. And you don't mean to be so understood — that that was
the reason for making a lower rate, because you wanted to fill
your empty cars ? A. No, I did not mean to be so under-
stood.

Q. Didn't j-ou think that reducing your rate westbound
from New York, would have the result of filling your cars more
than they are now filled ? A. Possibly we might get some
more business than we do if we did it.

Q. Have you ever made an estimate of how much it costs
you to haul back an empty car coujpared with how much it
costs you to haul back a full car from New York to Chicago ?
A. I don't think I ever have.

Q. Can you give this committee a guess as to the differ-
ence ? A. No, sir ; I decline to guess ; I decline to give a
guess.

Q. Have you an estimate ? A. I have never made an
estimate.

Q. How many cars make up a train ? A. We average forty-
five cars to a ti'ain.

Q. Full ? A. Tull or empty, as the case may be.
Q. Is there not a very much larger proportion of empty
cars ? A. The cars come East loaded ; forty-five cars to the
train ; we must take take back the same number — forty-five
cars to the train.

Q. You carry forty-five cars to the train ? A. That is the
average.

Q. Each engine that comes East as a general rule goes West
again ? A. Yes, sir.

Q. And it does so, whether it draws back full cars or
empty ? A. Yes, sir.
25

290

Q. The brakemen that come East from Chicago go West
again ? A. Yes, sir.

Q. Whetlier you draw back full or empty cars ? A. I am
speaking now from general knowledge ; I don't know what
they do on some roads west of us.

Q. I am speaking generally ; that, certainly, woiild be true
of your so-called through line, Blue Line, Red Line, ttc. ? A.
Yes, sir.

Q. it would be true of the Merchants Despatch, wouldn't
it ? A. True of all our trains.

Q. It is true with the main part of your traffic ? A. Yes,
sir.

Q. What proportion of the expense of hauling a train of
forty-five cars from New Y^ork to Chicago, or Chicago to New
York, is due to the fact that those cars are full or empty ? A.
I cannot tell you.

Q. You have never, as Traffic Manager of the New York
Central Railway, taken the trouble to inquire ? A. I have
taken the trouble to inquire on all these points and never
could get any satisfactory information.

Q. And you have never taken the trouble to inquire at what
rate it would pa\ 3-0x1 to take goods west rather than to take
empty cars west ? A. No, I have not.

Q. You have testified to this Committee, when I asked you
the question whether twelve and a half cents a hundred paid
your road for the haiiling from Chicago to New York for David
Dows A' Co.

Mr. Bakee — Twelve cents a hundred ? A. No ; twelve and
a half.

Q. If twelve and a half cents paid your road on the haul
from Chicago to New York, for David Dows it Co. — you told
us that that depended upon circumstances — rather than bring
back the cars empty, twelve and a half cents would pay you to
do that ? A. I think if you refer to my testimony you will find
I did not say that.

Q. The Committee will remember some answer to that effect ;
as to the question about David Dows & Co., I shall not insist ;
but as to the question whether twelve and a half cents paid
you for the haul from Chicago to New York, your answer was
that depended upon circumstances ; you did not think it did,
but rather than to bring the cars through empty, it vsrould be

291

better to have twelve and a half cents ? A. No ; I did not say
so.

Mr. Hepburn— No : T think the witness said better to biing
it at that price tliaa not to bring it at all.

By Mr. Stekne :

Q. If you said it was better to bring it at that price than not
to bring it at all, didn't you mean that it was better to bring
it at that price, than to haul back empty cars ? A. No ; I did
not.

Q. What did you mean ? A. I meant that through our con-
nections in the west we are competing with all these other rail-
roads ior business ; that the Grand Trunk, Penusylvania and
Baltimore and Ohio, are seeking, not only to take all the busi-
ness that comes to New York they can, but to divert as much
of it as they can to Philadelphia, to Montreal, Portland, and
every where else than New York, and it would be better lor us
to carry the freight at twelve and a half cents a hundred than
to go out of the market ; that is what I meant ; that il we were
to refuse to carry freight for twelve and a half cents to New
York, when the Baltimore and Ohio were offering to carry it
to Baltimore for ten, the shippers would say to us after a while,
" We don't want to do business with you ; if you won't meet
the competition, we won't do the business."

Q. Haven't you got the same competition westward that you
have eastward ? A. We did have until we made an agreement
to stop it.

Q. And, therefore, the only reason why you don't haul as
cheap as you can is because you have made an airangement
or agreement with other corporations by which freight rates
are maintained at a certain figure ? A. If you mean that as a
question, you must put it in the form of a question.

Q. Is that the only reason ? A. Ask me the question.

Q. I did ask you ? A. I didn't hear the question.

Q Then the only reason why A. Pardon me, you are

not asking a question ?

Q. Yes, sir ; the word " then " starts the question ; then
the only reason why you do not carry at twelve cents a hun-
dred, westward, ik because you have made an arrangement
with the other railways by which rates are maintained above
that rate ; is that it ? A. You ask me a question now.

292

Q. Yes, sir? A. No; it is not.

Q. If there is any other reason, what is it? A. Ask your
question, and I will answer.

Q. If there is any other reason, what is it? A. The reason
for what ?

Q. Tor not charging the twelve cents a hundred on western
bound freight as you did on eastward bound ? A. We are not
compelled to meet competition.

Q. In short, you have no longer any competition ? A. Oh,
yes ; we have competition ; we have the Grand Trunk running
over here by the way of Portland ; we have the Erie Canal ;
we have the Vermont Central, running by the way of New
London; wo have plenty of competition.

Q. But it is not so active a one as the eastern competition ?
A. No ; it is not.

Q. Does it cost you any more to haul a train of cars from
New York to Chicago — forty -five cars laden — than it costs you
from Chicago to New York? A. I should say it did; yes, sir.

Q. If so, why ? A. Well, one element which would enter
into the cost would be the loss and damage account.

Q. That arises from the quality of goods you carry ? A.
Exactly.

Q. Well, another element? A. That would be the principal
difference ; it costs us more to handle the west bound goods,
both to receive it and load it and to deliver it.

Q. How much more? A. I cannot tell you that; a good
deal more ; it costs us practically nothing to handle a car load of
grain, because it is loaded at the west by the shipper, and the
cost of unloading the car at this end is very slight.

Q. Is there any contract existing by which the handling is
done here in New York ? A. The handling of freight ?

Q. Yes, sir. A. Westbound freight ?

Q. Yes, sir ? A. No.

Q. At your depot ? A. No.

Q. Is the westbound freight handled by the employes of
your company ? A. Yes, sir.

Q. And paid by the company ? A. Yes, sir.

Q. That is uuder^your direction? A. Generally; yes, sir.

Q. You cannot tell us how much that amounts to? A. Not
at this moment.

Q. Can you furnish the data to this Committee ? A. I think

293

quite likely I could ; it would take some little time to do it,
though.

Q. What it costs to handle west bound freight ? A. Yes,
sir.

Q. Does it cost you more to handle West bound freight than
its costs the Baltimore and Ohio, the Erie, or the Pennsyl-
vania ? A. I don't know.

Q. Is there any element, that you know of, which makes the
cost greater to your company than to those other companies
with whom you made this arrangement ? A. I could not tell
what it cost them, and therefore could not form an opinion.

Q. You don't know any element, do you? A. I don't know
anything about it.

Q. Well, do you know of any element that increases the cost
to you ? A. No.

Q. You don't know of any ? A. I don't.

Q. What, then, is there under your arrangement as to west
bound freight between the rates from New York, as compared
with Boston and Philadelphia and Baltimore ? A. Do you
' mean what difference in the rate ?

Q. Yes, sir ? A. From Boston to New York they are the
same ; if I remember correctly, on first class the rate from
Pbiladelphia is six cents, and on fourth class it is two cents,
and the intermediate figures I don't remember.

By the Chaieman :

Q. This contract- will disclose those rates? A. Which con-
tract ?

Q. This pooling contract ? A. I don't think it will.

By Mr. Steene :

Q. As to Baltimore, what is the diff'erence ? A. I think it
is three cents on fourth class and eight cents on first class.

Q. If I understand you right. New York City is charged
more — the differences that you have named — than the other
cities ? A. No ; not than all the cities ; not Boston.

Q. (Interrupting.) No ; than those that you have named ;
Boston is the same ? A. New York and Boston are the same.

Q. They are the some ? A. New York and Boston are
higher than Philadelphia and Baltimore ; is that what yoii
want to know ?

294

Q. Yes. A. Yes, sii.

Q. And higher to the amount of six cents a hundred on first
class, two cents a hundred on second class ? A. No ; two
cents a hundred on fourth class, I said.

Q. Intermediate classes having intermediate percentages ?
A. Yes ; intermediate figures, yoa mean ?

Q. Yes, sir ; intermediate figures ? A. Yes.

Q. When during your administration were the rates the
same between Philadelphia and New York and Baltimore and
New York to western points? A. I don't think they ever
were the same.

Q. When were they during your administration lower from
New York than they were either from Philadelphia or Balti-
more ? A. I could not tell you that.

Q. There were times when they were lower? A. I don't
think there ever were any times.

Q. Are you quite sure of that? A. I am quite sure that I
don't think it ; I don't remember any such case.

Q. What before the pooling arrangements were made was
the difference between New York and Philadelphia and Balti-
more and New York 'r A. I don't remember.; but those dif-
ferences were arranged about a year, I think ; no, it was not
a year ; jierhaps two or thrfee months before the pooling
arrangement was made ; they are less than they used to be.

Q. The differences are less than they were under the old
freight arrnngements ? A. They are less than they were prior
to the spring of 1877.

Q. Prior to the spring of 1877 the railroads operating under
what was called the Saratoga arrangement, was it not ? A.
No ; that Saratoga arrangement lasted only a very short time.

Q. When was that in existence ? A. I think that went into
effect in the early fall of 1874, and lasted until about the 1st of
January, 1875.

Q. Now, before the early fall of 1874, during an active com-
petition between the various railways that centered at the
eastern points, were not the rates from New York as low, if
not lower, than they were from other cities in the East ? A.
I don't think they were ; I don't remember any time ; there
may have been some time when cut rates were being made.

Q. Ou what basis is it that you consented to an arrange-
ment by which New York is placed at a disadvantage of two

295

cents a hundred on fouith class, six cents a hundred on first
ckiss as compared with Baltimore and Philadelphia ? A. 'We
never did consent to it ; they took it, and we could not help
ouri^elves ; we tried to make the rates uniform, and had what
you call a railroad war duiiiig the whole year of 1876, and we
got as near to a settlement of the question with them as we
could.

Q. Wasn't it because they would not consent to enter into
any pooling arrangements with you, unless you consented to
their terms ? A. No, sir ; it was not.

Q. Not at all ? A. No, sir ; it had no bearing on it what-
ever.

Q. How did you then come to consent to their arrangement?
A. We did not consent to it; we could not help ourselves.

Q. Why couldn't you help yourselves? A. We made as
good an arrangement with them as we could.

Q. Could you not have refused to make any arrangement at
all ? A. And carry freight all the year for next door to nothing.

Q. I ask yoii the question : Couldn't you have refused to
make any arrangement at all ? A. I will answer that by say-
ing no.

Q. Why not ? A. Because we could not afford to ruin
ourselves.

Q. The reason you went into the arrangement was for pro-
tection to your own railway ? A. Exactly.

Q. And they insisted upon making that discrimination
against New York as a basis? A. Well, I don't think it was a
discrimination.

Q. They insisted upon making those figures ; I won't char-
acterize it or describe it. A. They insisted upon making those
differences.

Q. And you consented rather than have a railroad war ? A.
We thought tliey were fair.

Q. Why do you think them lair ? A. Because we did not
believe that with those differences any of the trade of New
York could be takeu away from us.

Q. Was it because you thought you were farther away from
the west than the othei' cities, and that they had the advan-
tage? A. That was the reason they insisted upon making the
lower rate.

Q. Why, then, when the question of Boston came inio play

296

didn't you insist upon applying that rule to Boston, and insist
that Boston should have a higher rate, so that you should stand
as compared with Boston, or rather, that the New York mer-
chants should stand as compared with Boston merchants, in
the s-ime position that the Phihilelphia or Baltimore mer-
chants stand as cotupai'ed with those of New York ? A. One
reason was, it had been an established principle for a great
many years that New York and Bos-ton rates should be the
same.

Q. Principle between whom ? A. Between the railroads ;
it was done before my time ; and another is that the distance
is so slightly different from New York that it would not make
but very little difference in the rate.

Q. Isn't the distance from Boston to Chicago as much larger, ,
as compared with New York, as the distance between Phila-
delphia and Chicago, as compared with New York ? A. No.

By the Chairman :

Q. Tell us the figures, Mr. Butter ; what is the difference in
miles ? A. By our line it is fifty miles further from Buffalo to
Boston than it is from Buffalo to New York.

Q. How much further is it from New York than Phila-
delphia? A. By the Pennsylvania Eailroad about ninety
miles ; that is the difference.

By Mr. Sterne :

Q. What is the difference between this city and Boston ?
A. By our line fifty miles.

Q. The question is not by an air line, bat by actual line ;
what is the difference in miles between Chicago and Boston by
the Boston & Albany Road ? A. Our line, I said fifty miles was
the answer.

Q. What is the difference by the Pennsylvania road ; you
see every line makes a difference practically because they turn
the angle and the Pennsylvanii goes straight through ; what is
the difference, by the Pennsylvania road, from Chicago to New
York, as compared with yoUr line from Chicago to New York?
A. By the way of the Pennsylvania road it is 920 miles, I
think.

Q. And by your road ? A. By the way of Buffalo it is 984,
and by the way of Niagara Falls 963 miles.

297
By the Chaieman :

Q. Now my question; I want to know how mucli nearer Phila-
delphia is to Chicago by the Pennsylvania road than New York
is to Chicago by your road ? A. Well, 154 miles is the differ-
ence.

Q. Now the same question as to Baltimore ; how much nearer
is Chicago to Baltimore by the Baltimore & Ohio than New
York is by your road ? A. I don't remember the Baltimore &
Ohio distance ; it is about 200 miles, I think.

By Mr. Stebne :

Q. Now, on the eastbound traffic, what difference is there
made between New York and Boston, and Philadelphia and
Baltimore, as to rates from Chicago ? A. Three cents a hun-
dred to Baltimore, two cents to Philadelphia less than New
York, and Boston five cents higher.

Q. So the rule that applies on westbound traffic is not made
to apply on eastbound traffic as to Boston? A. No.

Q. Is that under the new arrangement which has just been
entered into ? A. It was under the arrangement which was en-
tered into in the early part of 1877.

Q. Who are the parties to that arrangement ? A. The Pres-
idents of the different roads, and they were attended by their
Vice-Presidents.

Q. I am asking who made it ? A. What railroad made it ?
Q. The Traffic Managers made it, did they not ? A. No ;
that was done by the President.

Q. How long did that subsist ? A. That is in existence yet.
Q. Isn't that now in process of being modified by a new
arrangement? A. No.

Q. This recent conference of Traffic Managers to carry out
an arranj^ement that was entered into at Niagara Falls, and by
reason of which you were excused from attendance on this
Committee for some days, related to what part of the traffic
management? A. The eastbound freight.

Q. We were talking of eastbound freight just now, were we
not ? A. Yes, sir ; we were talking of eastbound ; yes.

Q. Then some modification was entered into, was there
not? A. Not of those differences I spoke of.

Q. What modifications do you now speak of? A. There
26

298

were no modifications made ; we made an agi-eement to restore
rates, and, if possible, make a pool.

Q. A pool similar, if possible, to that which exists in regard
to the westbound freight in the hands of Mr. F'mk ? A. Yes,
sir.

Q. Did Tou succeed in eflfecting that object ? A. We have
not entirely succeeded ; I think we shall.

Q. Now that pool, jon saj, restores the rates ; restores them
to what? A. It restored them to 15 cents ; I beg your pardon ;
did you ask me if the pool did it?

Q. Tes ; there is no pool, is there ? A. There is not any
pool ; the arrangement was to place the lates at 15 cents for
grain, and 20 cents for fourth class freight, and on the 23d to
place it at 20 cents for grain, and 25 cents for fourth class.

Q. For bow long a period was that arrangement to subsist ?
A. There is no special agreement as to how long it shall last,
except there is no change in the rates to be made without
giving ten days notice.

Q. Xow, under that anangement do you think it pays your
road to carry traffic at 1-5 cents and under, from Chicago to
Xew York "? A. I cannot tell whether it does or not.

Q. And you would have this Committee believe that you
entered, in behalf of the New York Central Eailway, into an
arrangement to subsist, for an indefinite length of time, by
which you agree to charge no more nor less than 1-5 cents a
hundred, without knowing whether that arrangement will yield
a jsrofit or a loss to your corporation ? A. You have been
making another speech, Mr. Sterne.

Q. I want an answer? A. You ask me a question and I
will undeitake to answer it.

Q. I asked it. \. Ask it again, if you please.

Q. I will have the stenographer read it.

(The question is read by stenographer.)

A. No ; I would not have them think so, and besides that,
they have not agreed for an indefinite length of time.

Q. For what length of time have you agreed ? A. We have
agreed to those rates until the 2od of this month.

Q. And what rates are to take the place of those after the
23d of this month ? A. Five cents higher.

Q. How long is that arrangement to subsist? A. It is
bound by the agreement to subsist for at least ten days.

'29<)

Q. It is to subsist for an indefinite period of time with ten
days' notice? A. "We agree not to change the rates without
giving ten days' notice to the public.

Q. "Will 20 cents a hundi-ed pay your corporation a profit ?
A. I don't know.

Q. On eastbound traffic ? A. I don't know.

Q. Yon have told us that the great bulk of your traffic is
eastbound ? A. Yes, sir.

Q. And you are willing to make an arrangement with other
corporations by which you bind your corporation as to the
bulk of your traffic without knowing whether that traffic is
carried at a profit or a loss? A. I don't kuow whether it is
carried at a profit or a loss.

Q. Did you take any trouble to inquire ? A. I hove at dif-
ferent times tried to find out what it cost to carry freight and
have not been able to do so.

Q. From whatever information 3'ou havo derived from all
sources, what is your opinion whether this carriage at 20 cents
a hundred will yield a profit or a loss ? A. I cannot tell you.

Q. Cannot you tell us what are your impressions ? A. I
don't know.

Q. How many points does that arrangement cover beyond
the State of New Y'ork ? A. It covers pretty nearly the whole
west.

Q. Pretty nearly the whole country, does it not ? A. Yes,
sir ; that is not that rate, but the basis of that rate-

Q. How much of the 20 cents a hundred from Chicago does
your corporation get — the New York Central A' Hudson
River Railroad ? A. Do you want to know exactly ?

Q. Yes. A. Then I will have to make some figures ;
(after reckoning it up) a fraction over eleven cents.

Q. Then you make the haul from Buffalo to New York, at
20 cents a hundred 11 cents? A. Make the delivery here in
the harbor.

Harviij Farrinyhm being duly swoi'n, testifies as follows :

By Me. Sterne :

Q. "What is your business? A. I am a wholesale grocer in
this city, corner of Maiden Lane and Front Street.

Q. Have you been doing and do you do a large business

300

through the State of New York ? A. Yes ; we do considera-
ble in this State, more perhaps west of this State than we do
here.

Q. Do your customers visit New York, or make their pur-
chases in New York, as much as they did formerly ? A. No,
sir ;. they do not,

Q. Do you know to what that change is due ? A. There are
quite a number of causes ; I don't know that I could swear to
any specific cause ; it seems to me that the reason that custo-
mers do not come here as much as they did is because the
goods are shown to them in their own stores by sample; that
has become the custom of houses that are doing the kind of
business that we are, and perhaps those that are doing more in
this specific way that you speak of than we are — to send out
their salesmen with samples ; they exhibit them to the mer-
chants, and they buy them in small quantities as they want
them ; to what the growth of that way of doing business is due
I am not prepared to say wholly ; it grew out in part of com-
petition ; I think that system was first inaugurated by the in-
terior jobbers ; that is my impression about it.

By the Chairman :

Q. Tliat has nothing to do in and of itself with where the or-
der is given, has it ? A. I don't think it has ; I think perhaps
the system was ioitiatod first by the manufacturers of different
kinds of goods, not entirely in our trade, but the manufacturers
of all classes of goods in the country; I think they were the
first to establish that system of selling by samples, and then the
interior grocers and jobbers, in tlie interior cities; it was some-
what necessary, perhaps, for them to build up their trade in
that way, and that of course necessitated the custom which
has been established here in New York.

By Mr. Steene :

Q. "What influence, if any, do you think the giving of spe-
cial rates to large shippers in the interior has had? A. I
think the giving of special rates to interior jobbers would en-
able them, of course, to compete more successfully against
New York merchants than they could otherwise ; if they paid
the same freight that the retailer or parties handling less
goods — the large retailer or small retailer — if they had to pay

301

the same rate, of course they could not as well compete with
New York as they would with a low special rate.

Q. And the retailer now is compelled to buy more at these
interior points in consequence of special rates ; is that your
opinion? A. I don't know that a technical answer to that
question would cover the ground ; he is more likely to buy,
of course, where the goods can be delivered to him at the
cheapest price and freight ; the freight, of course, makes
up a part of the cost of the goods at the merchant's store ;
if, taking the matter of freight into consideration, the in-
terior jobber is enabled to lay down goods at a man's place
a little lower than the New York merchant, considering the
freight, of course, he gets the trade — is more likely to get the
trade.

Q. What think you of the principle that should govern
freight arrangements as to wholesale and retail ; should it, or
should it not, go beyond the mere additional cost to the rail-
way company for handling the smaller traffic as compared
with the larger one to the same place 'i A. An answer to that
question would depend upon what obligation a corporatioti
owes to the people of the State and all its interests more es-
pecially than individuals ; I suppose as a merchant that I
have a right to sell a man a hundred half chests of tea at a
less price than I should sell another man one ; you understand
what I mean.

By the Chairman :

Q. You can afford to do it ? A. Yes ; of course, nobody
can control me in that matter ; I have an independent right as
a citizen and as a merchant to make that discrimination be-
tween the large and the small buyer; of course, to give a tech-
nical answer to Mr. Sterne's question, it raises the question of
whether the people have a right to demand of a corporation a
different action from what the merchant has a right in his own
independent position to assume ; that question, of course, I am
not prepared to answer.

T)ie Chairman — That is not a question of testimony, really ?

The Witness — No, sir.

By Mr. Sterne :
Q. Do you know of any special cases of discrimination? A.

302

No ; I do not ; I have never inyestigated the matter ; it is prop-
er for me to say right here, perhaps, that our trade is of a
very general character ; in one branch of our business, which
is a specialty, the larger branch of it, we sell these interior job-
bers fiom here to Omaha goods ; we sell them teas to distribute
among their retail customers ; onr retail trade is quite limited
to what it used to be ; we used to do a general retail trade from
here to the Mississippi Eiver.

Q. By retail trade you mean selling to retail dealers ? A.
Tes, sir, that is what I mean ; and therefore, those parties that
we sell to, the interior jobbers, the large jobbers in the
west, make their own rates on freight ; we have nothing to do
with it ; they order their goods and give us shipping directions,
and we don't know what their rate is unless the question comes
up ; we make no contract with them.

By Mr. Shipman :

Q. Tou have no particular interest ? A. No particular in-
terest ; they make their own contracts ; they ship by all vari-
ous lines, by freight companies and by freight lines, and we
know nothing about their rates, except when we hear com-
plaints, as we have heard from merchants at Chicago that they
were compelled to pay more on teas than they thought they
ought to.

By Mr. Stekne :

Q. Is Leggett & Co. the largest grocery house in New
York ? A. I think not, sir ; I should think there might be
several equally as large, and some larger.

Q. Doing business in New York ? A. Yes, sir.

By the Chairman :

Q. You have no special rate '? A. No, sir ; I never have
asked for it at all ; perhaps I ought not to say that exactly ; a
year ago this last winter there was quite a number of us
among the larger jobbers of teas that asked to have the rates
on teas reduced ; that is, reduced from the second class, I
think it is, to the third, putting tea upon the same basis as
coffee, to the western cities for the purpose of successfully
competing with the Chicago importer who has an advantage
in that regard.

303

Q. How has he an advantage of you ? A. Goods coming by
the Pacific Kaih-oad, the Pacific Mail Steamship Company, of
course we have the disadvantage of the transportation from
there here and back.

Q. Do you get your teas over the Pacific road ? A. We get
a good many of them that way.

Q. And then ship them back west? A. Then ship them
back west.

By Mr. Shipman :

Q. If delivered at Chicago it would save passage from Chi-
cago here and back to Cliicago ? A. Yes, sir ; but a consider-
able portion of our goods coming by Suez Canal, of course
are laid down here at the same rate that the Chicago mer-
chant gets his by the Pacific Railroad under their special con-
tract ; we wanted to have the difference — the large difference
— adjusted between here and Chicago and those western
towns.

By Mr. Husted :

Q. Between second and third class ? A. Yes.

Q. Between coffee and tea? A. Yes ; Itliought we showed
conclnsively that the rate on tea was too high in proportion to
other goods, but we did not succeed ; that is all the favor I
have ever asked from the railroad company ; it is fair to say,
probably for myself, th;it we in our business do not feel the
discrimination as much as those that are doing almost exclu-
sively this general trade with the retailers ; we do, compara-
tively, so little of it that we have not made it a subject of com-
plaint, and have not made it a subject of investigation.

By Mr. Shipman :

Q. Within a comparatively few years Chicago has become
the centre of a very large jobbing trade ? A. Yes, sir.

Q. There have been various causes, which have tended to
produce that independent of the question of the freight on
railroads? A. The growth of the country.

Q. It is a great centre of population there in that fertile
region; that has been stimulated also by the law of Congress
of the United States, which allows goods in bond to be taken
to Chicago ? A. Yes, sir.

304

Q. A great variety of causes operate to produce that ? A.
That, perhaps, was one of the most important at the time it
was estabhshed, as far as our own trade was concerned.

Q. One of the most which? A. One of the most important
aids that they had at the time it was established, considering
that there was a duty on our goods.

• Edxvard F. Gibbon, being duly sworn, testified as follows :

By Mr. Steene :

Q. What is your business? A. I am cashier for B. T.
Babbitt?

Q. Messrs. Babbitt & Co., are what? A. Soap manufacturers,
New York City.

Q. Compared with other soap manufacturers, are they a
large or small house? A. I think they are the largest; I
don't think there is any doubt of it ?

Q. Do you, of certam classes of soap, sell more than any
other house in the City of New York ? A. We do.

Q. What class is that ? A. " Babbitt's Best Soap."

Q. That is the laundry soap ? A. The laundry soap ?
•Q. How largely throughout the State of New York? A.
Very large.

Q. Do you sell to Grouse & Company, of Syracuse ? A.
We do.

Q. Under what terms of freight, do you sell direct to
them ? A. We sell our goods delivered in Syracuse.

Q. Are you required to deduct from your bills the schedule
rate ? A. We generally do deduct schedule rate, because that
is customary with us ; I don't know as there is any compul-
sion about it.

Q. In the case of Crouse & Co., do you remember a particu-
lar transaction of a large sale, wherein you insisted upon having
deducted from your bill but the rate at which Cronse & Co.
had the goods shipped to them ? A. I could not give any par-
ticular instance, but there were several large shipments to the
Crouses, when the lowest rate we could get was twelve cents.

Q. You asked for a rate ? A. Yes, sir : I asked for a rate,
and that is the lowest they would give me.

Q. At the office ? A. At the office of Mr. Goodman, of the
New York Central Road.

305

Q. You saw Mr. Goodman ? A. I did ; I saw Mr. Good-
man.

Q. And he would not give you a rate, lower than twelve ?
A. He would not give me lower than his regular schedule rate,
twelve cents.

Q. Did he give j-ou a reason why he would not ? A. His
reason was that Messrs. Grouse were very heavy shippers with
them, and he thought they ought to give us the benefit of
their contract.

Q. He thought they ought to have given you the benefit of
their contract? A. Yes, sir.

Q. Did you tell him that they did not? A. I told him they
did not give us any benefit from their contracts.

Q. Did he tell you at what rate Grouse was getting the
goods shipped ? A. I told him I did not know what the ar-
rangements were between him and Mr. Grouse, and if he had
any objection to telling me what Grouse paid ; he told me they
paid eight cents.

Q. And you were required to deduct 12.| cents ? A. We
were — 12 cents.

By the Chairman :

Q. Deduct 12 cents from what? A. Per box from their bill
of freight ; he had a special arrangement with them for eight
cents, so he was making four cents on freight out of our
house ; we were losing four cents a box, and Grouse was get-
ting the benefit of it ; because they had special rates which
they would not give us.

Q. You said you delivered the goods there for so much ?
A. We delivered them to Syracuse ; the freight bill would go
with the goods, and Grouse would pay it ; we would not see
any freight bill ; I went there to the ofiiee of the Gentral
Railroad and asked them what arrangements I could make
with them ; he told me they could not give me a better rate
than 12 cents a box ; I told him that it was not fair that par-
ties in the middle of the State should get a lower rate than
we could, shipping as we were tons of goods over their road,
not only through the State, but further West ; he said ;
" well, we cannot help you."

Q. When you say "he," you mean Mr. Goodman? A. I
mean Mr. Goodman ; he said he could not assist me ; he could
27

306

not make any arrangement ; I asked liim why ; he said, " Mr.
Grouse ships hundreds of tons of freight over our road every
year ;" I told him that had nothing to do with us ; we were
merchants here in New York doing business, and we wanted
to ship our goods as cheap as anybody else.

By Mr. Baker :

Q. So, Mr. Grouse settled the freight bill, and you allowed
him twelve cents? A. We deducted twelve cents from our
invoices, which was the customary way of doing business.

Q. And they settled it at eight cents ? A. They settled it
at eight cents, as Mr. Goodman told me.

By Mr. Steene :

Q. Did you then ask him for a special rate upon your goods
through the State of New York, lower thaa the schedule rate ?
A. I did ; I asked to be placed on the same footing with Mr.
Grouse.

Q. Did he place you on any footing at all ? A. He told me —
he would not make any arrangement with me then ; I asked
him when he would ; he said : " call in the spring ;" that was
last fall ; I told him I did not see what difference it made, as
long as we made the arrangement for a year, whether I should
come in the spring if it ran the year round, not longer ; he said :
" you come in here when the canals are all closed, and want
to get a special rate ;" I told him it made no difference now, as
long as we made it for a year, whether the canals were closed
or not ; he would get the benefit of the canal just as well as we
would.

Q. He did not give you a special rate ? A. He did not.

Q. Has he since ? A. He has not.

Q. Have you made application since ? A.I have not per-
sonally.

Q. Your house did ? A. The house did.

Q. How large are your shipments over the New York Cen-
tral Koad ? A. Per year ?

Q. Yes ; how many tons, think you, do you ship over the
New York Central Eoad a year ; if you have any computation
in your own mind for less than a year, you may give that? A.
I could not tell ; it is an immense quantity ; majority of our
goods go over their road going to the west.

307

By the Chairman :

Q. How many car loads do you ship a week ? A. Five hun-
dred boxes would, of soap, make two car loads ; the shipments
that we make to Grouse ; it takes about 250 boxes to a car, and
we are continually shipping every day, more or less.

By Mr. Steene :

Q. Do you ship more than a car load a day ? A. I should
think a great deal more.

Q. Give to the Committee, as near as you can, the amount of
your shipments over the New York Central Koad ? A. For a
year?

Q. Yes ; could you furnish the data ? A. I could find out by
'consulting my books.

Q. Then send it in to the Chairman ; with what degree of
regularity are those shipments ? A. They are made every
day.

Q. And how as to classes of goods ? A. All our goods are
fourth class.

Q. I mean as to uniformity ; they are put up in uniform
boxes, are they ? A. All in uniform boxes.

Q. Eeadily handled ? A. Very easily, I should think.

Q. How, as to bulk, as compared with weight ; in other
words, can you fully load a car with your goods to its maxi-
mum capacity of carriage ? A. Yes, we can.

Q. You can put ten tons into a car, can you ? A. Yes.

By the Chairman :

Q. In what lots were these goods that you shipped Grouse
for which you were charged 12 cents, and he only 8 cents ? A.
All the goods that we shipped to him in a year.

By Mr. Sterne :

Q. How large were the lots— car lots? A. Yes, sir, car lots ;
two car lots inside of a month.

By the Chairman :

Q. They were not broken pack&ges ? A. No, sir, nothing
less at any time than fifty boxes.

308

By Mr. Stebne :

Q. Those other shipments would be more than fifty boxes?
A. Oh, yes.

Q. How many ? A. Five hundred boxes at one time ; and
in fact, one thousand boxes at one time.

By Mr. Bakek :

Q. Do you ship to wholesalers in Buffalo and liochester ?
A. Yes, sir.

Q. Do you have the same difficulties there ? A. Yes, sir ; the
same difficulties all through the State ; we find they all have
better rates than we do.

Q. Who do you ship to in Bufi'alo ? A. Miller, Greiner &
Co., Phillip Becker & Co. ; in fact we sell to all the wholesale
grocers thei'e.

By Mr. Moyes :

Q. What are the rates to Buffalo ? A. We cannot get better
rates than twenty-three cents.

By Mr. Baker :

Q. What is the rate to Rochester? A. The rate to Eochester,
I think, is about fifteen cents a box, that we pay ; we deduct
that from our bill the same as the other.

By Mr. Low :

Q. What does a box weigh — one hundred pounds? A.
I would not be certain ; I think seventy-five pounds.

By Mr. Baker :

Q. Do you ship to all the wholesale merchants in Eoches-
ter, also ? A. Yes, sir.

By Mr. Shipman :

Q. How many boxes of soap do you usually ship a day by
the Central Eoad ? A. I don't, of course, know to a box, but I
see the orders that come in, most all of which are shipped the
same day they are received ; I should think we shipped on an
average from one hundred to one hundred and fifty or two
hundred boxes a day.

309

Q. That one hundred or one hundred and fifty boxes that
you shipped in a day don't go to the one place or to one per-
son? A. No.

Q. They are distributed along to different stations on the
route ? A. Yes, sir ; aiifty box lot is the quantity to one man;
nothing less than that.

Q. Don't you sell any quantity less than fifty boxes ? A.
We do not ; that is, very seldom ; mostly fifty box jots.

Q. When you ship 150 boxes a day those would go to differ-
ent persons in 50 box lots ; that would be three persons; would
they all reside in one town? A. Sometimes, sometimes we
would ship all to one town, Rochester, for instance, three
parties there we would ship to.

Q. That would not be usual; generally three shipments of 60
boxes each to be made in a day would probably be distributed
in three different towns ? A. I don't think it is very unusual to
have it go to one town ; for instance, in Rochester there are
several large grocery houses in the same town, and Buffalo the
same way.

Q. And the next day it would probably go to Utica or
Schenectady or Syracuse? A. Yes, we have made shipments
within two or th) ee weeks of about 6,000 boxes to Syracuse
and Rochester alone ; that is not to one man.

Q. Within three weeks ? A. Within three weeks we have
shipped a thousand boxes to four different wholesale grocery
houses in Rochester— a thousand boxes to each man.

Q. You delivered them to each one? A. We delivered them ;
yes, sir.

Q. Was this deduction of 12 cents a box which you say Mr.
Grouse required you to make ; he having paid the freight at
that end — was that the case with the rest of the peraons to
whom you shipped — did they make the same requirement ?
A. In Syracuse.

Q. Anywhere on the line of the road? A. We never heard
what they paid ; well, here is an instance, in Utica ; Mr Grouse
in Utica — there is another Grouse there — he comes down to
our office and says, " ship me a thousand boxes of soap on my
contract;" we require him to send his freight bill for tliM con-
tract, and, I find it is five or six cents lower than we can get a
rate on that thousand boxes of soap.

Q. The point is this ; you say that you ship your soap to Mr.

310

Grouse, lie having ordered, say, a thousand boxes, you say Mr.
Grouse pays the freight, whatever it may be there, at his rate?
A. Yes, sir.

Q. He then requires you in the settlement with him to de-
duct twelve cents a box for that freight? A. He does; the
regular rates.

Q. I want to know if that requirement is made by other par-
ties to whom you deliver goods ? A. Yes, sir.

Q. What others? A. Different towns); Perkins <fe Gompany ;
George C. Buell & Company.

Q. Don't go so fast now, and tell where they reside ? A.
George 0. Buell & Company, in Kochester ; I don't know that
it is required ; it is customary with us to do it, you know ;
Brewster, Gordon & Co., in Rochester ; H. Austin Brewster, in
Rochester ; Daniel Grouse, in Utica ; Gomstock Brothers, in
Qtica ; Head & Wenston, in "Utica ; Rawley & Nye, in Utica ;
John Grouse & Company, in Syracuse, and J. & G. N. Grouse
— two houses — Grouse Brothers, Grouse & Walroth.

By Mr. Bakeb :

Q. Do I understand you, that you never pre-pay freight ? A.
We never pre-pay freight.

Q. The customers always pay the bills ? A. We deduct
from the bill the regular rate ; then, of course, it is deducted
from the invoice, and he pays the invoice as rendered, less the
deduction as made by us ; it is the regular rate.

By Mr. Depew :

Q. How large are your shipments lo a single house, at the
same time ? A. A thousand boxes of soap ; that is |$4:,500 —
$4,700.

Q. That would be four car loads ? A. Four car loads of
250 boxes each.

Q. Did you say that you were refused a rate by Mr. Good-
man ? A. He refused to give me a rate at that time any better
than the regular rate ; of course, I could get that without con-
sulting him.

Q. Did you offer to make regular shipments for the year at
that time ? A. I went in and asked him if he would make a
contract for a year with me at special rates, the same as he had
been allowicg other men on the road.

311

Q. And he refused to make it at tliat time ? A. He refused
to make it at that time.

Mr. Baker : The witness says he told him to come in in the
spring.

Witness : He told me it was a very pretty time to come in to
make a contract, now when the canals were all closed ; I told
him it did not make any difference to us about it, and I didn't
suppose it would to him if we made a contract for a year ; of
course it would run around until that time ; he would get the
benefit of the canals because it would compel us to ship all the
following summer.

By Mr. Shtpman :

Q. Ton mentioned quite a large number to whom you sold
and delivered soap, and have stated, in regard to Mr. Grouse,
that a deduction was made of 12 cents per box ? A. That is
the deduction we make from our invoices, which is the regular
rate. •

Q. And you do that to all your customers? A. At the
ruling rate in the different towns ; for instance, of course it
would be higher in Rochester.

Q. I mean the tariff rate ? A. The tariff rate ; yes, sir.

Q. Did you sell your soap to these individuals all at the
same price ? A. All at the same price.

The following letter was subsequently received from the
witness :

New Yobk, June 20th, 1879.
Mr. Sterne :

Dear Sir, — We find, on investigation, the amount of freight
shipped by B. T. Babbitt over line Hudson River & N. T.
Central Railroad for the year 1878 to be 1,346 tons, as re-
quested by the Legislative Committee on Railroad Freight
Rates.

Yours respectfully,

B. T, Babbitt & Co.,

Per E. F. Gibbon.

312

Robert F. Austin, being duly sworn, testified as follows :

By Mr. Steene :

Q. What is your business? A. Wholesale grocer in the
city of New York.

Q. How long have you been doing business in the city of
New York ? A. I have been doing business in the city of
New Yoi-k ; this is the eighteenth year in this line of business.

Q. Do you deal largely with the interior points in the State
of New York ? A. Yes, sir.

Q. Do you sliij) largely over the New York Central Rail-
road ? A. We think we ship a great many goods over the road
in proportion to our business ; I don't know what you would
call a large business ; our business would be called pretty
large by some, perhaps, . compared with others ; we do a very
large amount of business ; I should say it was a pretty large
amount of business.

Q. How does the volume of business compare with Leggett
<fe Co.? A. I should judge it was about the same; I think,
perhaps, their city trade is larger than ours; I think our coun-
try trade is larger than theirs.

Q. Do your customers visit New York as frequently as they
did ? A. No, sir.

Q. Have you known, at any period of time of this habit of
discrimination by railways as to special rates? I have known
by report from our customers ; it was quoted' that that was a
reason why goods could be sold in the interior of the State so
that it was no object to them to come to this market.

Q. Do you attribute the falling off of customers coming to
New York City partly to this cause ? A. Yes, sir.

Q. Is it largely due to that cause ? A. I think it is very
largely.

The Chaieman here suggested that testimony of this kind
had better not be received, it being matter of opinion.

Q. Have you made application to Mr. Goodman for a
special rate ? A. I don't know that I have made application
specially ; I have made application through one of my sales-
men.

313

Q. You authorized the salesman, at all events, to try and
obtain a special rate ? A. Yes, sir.

Q. And you received an answer ? A. Yes, sir.

Q. What answer did the salesman make to you ? A. The
salesman brought with him a slip of paper on which he put
down a certain amouut which was called a concession from the
regular rates ; there was no contract, but a paper in which
there was certain figures put down, for certain distances on
the road.

Q. Have you got that paper still ? A. I think I have, in a
drawer.

Q. When was that done ? A. I cannot remember particu-
larly as to the date — I should say somewhere from the 1st to
the 15th of May.

By Mr. Hepburn :

Q. This year ? A. Yes, sir.

By Mr. Steiine :

Q. Have you had conversations with merchants in the inte-
rior of the State of New York, complaining to you that they
cannot compete with other merchants in the same locality by
reason of special rales being given to said other merchants ?

Mr. HEPB0EN — How is it material here ?

Mr. Sterne — It shows ihat between merchants in the same
locality a discriminating process is destructive to the business
of some individuals, but beneficial as to the business of some ;
that that very fine-spun theory that they have benefited the
locality by it has no basis of truth at all.

Mr. Hepburn — I think the contract had better be produced
from the books, and then, if necessary, an explanation may be
made.

By Mr. Sterne:

Q. Have you any knowledge upon the subject, how much
more it costs to transport goods to retail merchants, as com-
pared with the jobber ?

Mr. LooMis (interrupting). Personal knowledge ? A. No,
sir ; I do not know that I have, as a railway expert, any
knowledge of that kind, if you ask it in that sense j I can
28

314

answer it in another way ; I could not answer it as a man
having knowledge of it from experience as a railway man.

Q. Well, you do a wholesale and jobbing trade, and, com-
paratively speaking, a retail trade ? A. No ; no retail.

Q. You do a trade in which there is a considerable differ-
ence, is there not, between the volume of business that you
make with one man as compared with the volume of business
you transact with another ? A. Yes, sir.

Q. And this business also involves, does it not, separating
for the smaller dealer many parcels of goods in your ware-
house in many piles as compared with many parcels of goods
contained in your warehouse on one pile for one man? A. I
should answer that by saying that we sell some people in large
quantities whole packages, and for smaller dealers we break
packages for thi ir accommodation who do not want so many
goods.

Q. When you sell a large quantity of goods to one man, you
put it all in your warehouse upon one pile, don't you, for ship-
ment ? A. Yes, sir, generally.

Q. And you do that with refeience to the smaller shipper
also ; that is, you pile up your goods, pile after pile? A. Yes,
sir.

Q. Now, how much moj-e does it cost you to handle goods
for a smaller shipper than it does for a larger shipper ?

(Objected to as irrelevant ; objection overruled.)

A. Well, I would'say my judgment would be that in a trans-
action in our line of business, that it would cost us an addi^
tional expense of one and a half per cent, to sell the goods, to
break packages miscellaneously, more or less, than to sell in
unbroken packages.

Q. That also includes, does it not, the expense of piling them
in different packages as compared with a big pile ? A. It in-
cludes all the expense ; that is, if we sell a million dollars
worth of goods in full packages without breaking bulk, of
course the labor and expense would be less ; if you take that
same quantity of goods and you break the packages for the ac-
commodation of people it would entail an expense extra, of
one and a half per cent.

Q. Did you tell us what time it was when you sent your clerk

315

for that special rate ? A. I said I lliouglit it was between the
1st and 15th of May of this year.

Q. Will you send us the slip which was returned to yon, and
also the clerk ? A. The clerk is not here ; the clerk is in the
country, in the northern part of this State.

Q. Will he be here this week ? A. I do not think he will he
here in a month, but he can be had, if wanted, at Syracuse.

By the Chaibman :

Q. In whose handwriting was this slip ; Mr. Goodman's ?
A. I don't know, sir.

By Mr. LooMis :

Q. Is your opinion that the cost of one and a half cent ad-
ditional to break up packages and store them in your ware-
house for the delivery to customers based upon actual
experience ? A. I only judge this ; I think it could not be
much less than that — as a merchant.

Q. It is a guess that you hazard ? A. I don't think that I
have reduced that down to an absolute test ; but I think, from
my best judgment as a merchant that has sold goods for nearly
thirty years, that that would be about the point reached.

Q. You would not be surprised if, on an accurate computa-
tion, it would reach more than that ? A. I should be sorry in
my business to have it reach more than that ; I should think I
could not afford it very well.

Q. What proportion of your business is done by breaking
up the original packages ? A. As all jobbing business is done ;
perhaps two-thirds of it ; when I saj' that I don't mean to say
that all that constitutes breaking ]iackages, but I mean the bills
that are put on the sales book to be sold require more or less
of that to be done ; of course we have to do something to ac-
commodate a man's wants ; if a man should see any expensive
article that he might buy in a large quantity, a thing for which
he had a little sale, of course we would accommodate him by
putting it in a smaller package, and, of course, that entails
expense and labor.

Q. If you sell one-quarter of the original packages, do you
take into account the time during which the remaining three-
quarters would be unsold ; do you take that into account at all ?
A. Some things we refuse to break if they are too expensive, or

316

if they are of a class of merchandize that do not admit of
breaking. •

Q. That is not an answer to my question? A. What is the
direct question?

Q. Whether the time during which three-quarters of the
original package broken remaining unsold, occupying space in
your storehouse, is not an element of additional expense ?
A. Well, it would be my judgment that the outside figure that
I named would cover tliat.

Q. That you are disposed to adhere to ? A. Yes, sir.

Adjourned to Tuesday, June 17, 1879, at 10 A. M.

New Yobk, June 17, 1879, 10 a. m.

The Committee met pursuant to adjournment.

Present : All the members of the Committee except Messrs.
HusTED and Gkady.

James H. Butter recalled:

By Mr. Sterne :

Q. Have you brought the bcoks and papers called for? A.
I have not brought everything called for; I have brought
everything I could.

Q. What have you brought? A. (Reading from memoran-
dum.) " Book or books containing special rates to persons
shipping or forwarding on your road through traffic to western
points within the past three years ;" those books I brought ;
" books showing through traffic, special rates, anterior to pool-
ing contracts which have been made within the past two years;"
the books referred to contain that information.

Q. That is, the same books contain that information ? A.
Yes, sir, to the best of my knowledge: the next point, "What
proportion of your traffic that is done on the New York Cen-
tral and Hudson River Railroad, freight traffic, is done for lo-
cal points, which of course includes New York, Albany and
Buffalo, and what proportion of the whole traffic of the road is
for through points ?" that question requires explanation ; we

317

do not understand what you want by it, I said yesterday,
and you made some additions to your question which did not
cover the point.

Q. I want to know what business is done by your road — its
vohime ? A. Excuse me ; please be specific, because it has to
be given to clerks who have to make it up.

Q. Well, you can give your clerks the directions ; I want to
make myself understood to you ; I want to know — or the Com-
mittee wants to know — what your local business is in the State
of New York, and what proportion it bears to the whole of your
business ? A. You have asked that in another question.

Q. The reason why I include New York, Albany and Buffalo
is because in railway parlance you call those through points,
as they are terminal points of the two divisions ; now, the in-
formation that I want, I desire to have cover those points, as
well as intermediate points ; do j^ou understand me now, Mr.
Eutter? A. No.

Mr. Steene — Perhaps the Members of the Committee can
make Mr. Rntter better understand than 1 can, what the in-
formation is that is desired ; Mr. Hepburn, will you try ?

The Chairman — What is there about it?

The Witness — I want to know what the counsel or yourself
mean by through business, and local business ; and for your
information I will explain to you what I mean by through
business : I mean by through business that which is going
from New York to Buffalo, or beyond, on westbound ; and
on easternbound, that which is coming from Buffalo, or point
beyoud it, to New York, or from Buffalo or points beyond
Albany ; or from points beyond Albany to Buffalo, and points
beyond there ; that is what I mean by through business ; by
local busiuess I mean traffic from New York to any local point
on the road, or from any local point to New York ; or from any
local point on the road to Buffalo, or beyond it; or from any
point on the road to Albany, or beyond it, I would term local
traffic ; if it emanated upon the line of the road I would call
it all local business, no matter where it went, and if it went to
a local point on the road, I would call it local business, no
matter where it came from.

Q. You do not call Albany and Buffalo local points ? A.
Yes, sir ; I call Albany a local point if the trafiic does not
come from some point beyond Albany; if it comes from

3l8

beyond Albany we should call it tlnougli, if it was going
beyond the line of our road.

Q. What I think the Committee may want is a schedule or
a sheet showing how much of your business you do within
the State of New York, and how much you do outside of the
State ; that is, what amount of your business do you do in
the State of New York compared with the amount of business
outside ? A. I will show you ; I have a little memorandum in
my private book here that shows how the account is kept, and
if this will answer your purpose I can obtain it ; this is the
way our account is kept (showing and explaining private
book to the Chairman.)

The Chaieman— NoWj state your whole question.

The Witness — (Reading from memorandum.) " What pro-
portion of your traffic that is done on the New York Central and
Hudson River Railroad, fi-eight traffic is done for local points
which, of course, includes New York, Buffalo, and Albany,
and what proportion of the whole traffic of the road is for
through points."

Mr. Sterne —Now, leave out the last part of the question —
" what proportion of the whole traffic is for through points," and
just state to yourself the first part of the question.

The Chairman — (To Mr. Sterne.) Will you state now these
four propositions in the form of a question.

By Mr. Steene :

Q. Give us the amount of the traffic of the New York Central
and Hudson River Railroad which is done within the State of
New York, originating within the State and ending within the
State. Second — Give us the anlount of the traffic done on the
New York Central and Hudson River Railroad originating
withing the State at local points, incltiding Albany and Buffalo,
and running beyond the State ; then give us the amount of
freight traffic done on the New York Central and Hudson
River Railroad originating in New York, or from Europe, to
through points beyond the State of New York, or from any
other point, beginning at New York, to through points, or traffic
coming from any through points, and carried from New York to
through points beyond the State ; that is the whole of the traffic
of the road, isn't it ?

319

The Chairman— There is still another ; that coming from
the west.

Mr. Sterne — Yes; then the same from the west here.
(To the witness.) Give us first the amount of the eastward
traffic, from western points to New York City ; secondly, the
amount of eastbound traffic from western points to local points
within the State of New York, in which I include Buffalo and
Albany ; thirdly, the amount of traffic coming from western
points for through shipment to Europe — western traffic east-
ward bound ; and the amount of traffic done locally upon your
line, from every point to every other point within the State of
New York, eastward ; I want to know whether you have that
information ?

The Witness — I cannot give it to you, Mr. Sterne ; we have
always kept our account regarding Buffalo as a through point ;
if it went from New York to Buffalo, or from Buffalo to New
York, we considered it through freight.

Q. Couldn't you take from your books A. I don't be-
lieve we could, sir.

(Question continued.) — -The information that I want ? A. I
don't believe we could, if we took every way-bill that has been
made within any given time, and tell it accurately.

Q. How close can you get to ii ? A. I could not form an
idea ; I don't believe I could get it anywhere near enough to
be of any value as information.

Q. Couldn't you as to any part of the points that are touched
upon in the question ? A. Yes, I think I can ; some portions
of it.

Q. And, now which are those that you can give us? A. I
think I can tell you what the total carriage is from one station
to another within the State — what we call way or local freight;
I think I could j^ive that.

Q. Could you also give how much was earned on that ? A. I
think so.

Q. Then if you add the total carriage from New York to
Albany, from Albany to New York, from Albany to Buffalo,
from Buffalo to Albany, and from New York to Buffalo, and
Buffalo back, would not that approximately give the informa-
tion that I want as to the State of New York ? A. I don't think
it would.

Q. Could you give that information ? A. I can give you

320

what we term through freight from New York, and through
freight to New York, and through freight from Albany and
through freight to Albanj;.

Q. Couldn't you separate from what you call through freight
the Buffalo and Albany points? A. No, sir; we can't do it; it
is utterly impossible.

Q. As between Buffalo and Albany? A. I could not get any-
thing that would be accurate; the accounts have not been kept
with reference to that ; we have always regarded Buffalo as
through freight, just as we have regarded Dunkirk as through
freight, aud that is within the State of New York ; under this
term, through freight as I understand it, you would regard
Dunkirk as local freight for the Erie road.

Q. Yes ? A. It would not be local freight for us ; therefore
if we should call it through freight, and they call it local, would
you be getting the information you want.

Q. No, not if you persist in declining to give it on the ground
that I call it local ; and you call it through ; but if you waive
for the time being your classification and embrace under
" local " what you call " through " as to these several points,
why couldn't you give it theu ? A. We liave not kept our ac-
counts for doing it.

Q. Haven't you any accounts as to the amount of business
that you do to Dunkirk ? A. No.

Q. Haven't you any accounts of the amount of business to
Buffalo? A. From New York?

Q. From New York ? A. Yes ; to Buffalo, and beyond we
have ; what goes to Buffalo and beyond.

Q. Can't you separate what goes to Buffalo only from that
going beyond ? A. I don't think we can.

Q. Did you ever try to do it ? A. No ; on the contrary, the
whole course has been not to do it ; we have never had any
necessity lor doing it.

Q. Take the case of Albany to Buffalo ; can't you separate
that business from what you call the through business ? A.
Albany City business?

Q. From Albany to Buffalo ? A. Without regard to where
it came from ?

Q. Without regard to where it came from ? A. I don't be-
lieve we can ; the point that I have tried to make with you
here on this matter is, if you would tell ipe just exactly wha^

321

you want, we will endeavor to give it to you, or come here and
say we cannot.

Q. I have tried ;■ I don't know whether the questions I have
put to you are as clear as they may be put ; the Chairman un-
derstands precisely what I mean ; (to the Chairmau) : Will
you put the question to Mi-. Butter, kindly ?

The Witness — Will you allow me to make a suggestion ?

Mr. Sterne — Yes.

The Witness — That after you get through your examination
to-day you write out what you want, as you did yesterday, and
if we can produce it we will. There is no concealment about
this thing. We are willing to give auylhing that we have got
that we can give.

By Mr. Shipman :

Q. Your accounts are kept on a system by which you class-
ify your business and keep it under different heads ? A. Yes,
sir.

/ Q. Is it possible for you to decompose that and produce a
new classification here ? A. I don't thiuk it is possible ; I
would not go into the details of it ; from my general knowledge
I don't believe it is possible.

By Mr. Sterne :

Q. Who is the Auditor of your company ? A. His name is
Chambers;

Q. His first name ? A. Isaac P. Chambers.

Q. Has he charge of the books ? A. Yes ; under the organ-
i-'ition of the company he has charge of certain of them ; I
don't know that he has of all.

Q. Is not the officer known as Auditor the officer who has
general jurisdiction over the books, and to whom, finally, the
balance sheets and accounts are rendered showing the general
results of the administration? A. That is a detail of the
business that I am not familiar enough with to answer, but I
don't think he has.

Q. Who is that officer ? A. I couldn't tell you ; I don't
know that much about it.

Q. Who is the head book-keeper of your corporation ? A. I
don't know.

Q. To whom, for instance, if you wanted to get this infor-
29

322

mation and thought you could get it out of the books, would
you apply at your office to give it to you ? A. If I wanted this
iuformation that you are askiug me for, I sliotild go to Mr.
Chambers — in regard to these earnings and tonnage of freight.
,Q Tliat is the man whose name you have just mentioned,
isn't it? A. Yes, sir; the Auditor.

By the Chaihman :

Q. You would go to him for details simply ? A. I would go
to him for the iuformation ; he keeps the accounts ; I don't
keep any such account in my office.

By Mr. Steenb :

Q. You answered Judge Shipman, I think, a little hastily,
did you not, when you said that that accouut, after once being
made up in a certain way, could not be decomposed ; now, that
account made np in a certain way could be, could it not, de-
composed b.iek again into the elements that made up the ac-
count, and rearranged under the different headings ? A. I
don't believe'it could.

Q. Will you kindly produce the books which you have said
you would produce ? A. Which ones do you want ?

Q. Books containing these special rates on through traffic
for the past three years.

Mr. Depew — In regard to these books and papers and con-
tracts, I presume they fall within the same rule that the Com-
mittee have already decided in regard to the other books, that
they are not lor evidence, but for inspection. The objection
that we made to the others was, that their disclosure simply
benefited the few gentlemen who are prosecuting this inquiry
into t'.ie business of their rivals in the other parts of the State.
The ohjection we make to th s is, that it discloses to the
Pennsylvnnia, Baltimore & Ohio, the Grand Trunk and other
competing lines our contracts, with people with whom we are
constantly competing with them for the business, and discloses
to them the precise things that they have b^en trying in every
way to find out for years.

The CHAiiiMA.N — We receive the books ; I dou't understand
Mr. Depew to raise any objection.

Mr. Depew — I simply asked whether they were to be pro-
duced for inspection or in evidence.

823

Tlie Chaieman — The\' are i'ocei\ cd for insjsection ; whether
they are to be put in evideoce, will be determined hereafter.

The Chairman — "We have got some questions similar to
those which were put to the witness, and I will read them to
the witness, and as I state them, you may say whether or not
you will furnish the information ; first, on througji traffic east-
ward from and beyond all western termini to and from New
York and to all points east of Albany and Troy — can you fur-
nish the amount of the traffic over the New York Central &
Hudson River llailroad from and beyond all western termini
to and from New York to all points east of Albany and Troy ?

The Witness — Yes, I think I can ; I will try to.

The Chairman — From New York and east thereof, and from
Albany to and bej'ond the western termini — that is simply
the converse of the first proposition —through traffic westward
over your road, from New York and east thereof, and from
Albany to and beyond the western termini?

The Witness — Yes, I think I can.

The Chaieman — Now, local ; from all local stations to and
beyond all western terminal stations'?

The Witness — I fear I cannot get that ; I will, if I can.

The Chaieman — From all western terminal stations to all
local stations ?

The Witness — Yes ; I think I can get that.

The Chaieman — From all local stations 1o New York, and
East thereof.

The Witness — I am afraid I cannot get that, but I will
try.

The Chaieman — You can get it from all local stations to
New York, can't you V

The Witness — I am not sure ; I am afraid not.

The Chaieman — From New York to all local stations in ihe
State ?

The Witness — How long a time would you like to have me
take?

The Chaieman — We will not limit the time. The limit does
not apply to your ability to get it, does it ?

The Witness — Yes ; because I think wc might have to go
all over the way bills, and pick it out item by item, and it
might take a long time, as I think that these way bills, reports

324

and papers, after they have gone iuto the books of the company
are destroyed.

Mr. Depew— All this business is done by way bills. We
will say there is a million a day. They are entered in the books
under this other system. We have got to go back to the way
bills themselves and reconstruct the books, and have the
clerks go through the books day by day, to make the recon-
struction, that is, to form a new set of books on a new system,
from the old way bills.

The Chairman— Can't you give the amount of traffic from
local stations to local stations, including all other than the
foregoing ?

The Witness — I don't know whether I can or not. I can't
tell until I go to the office. I don't think I can. You put it
to me just as you want it, and I will get it if I can.

By Mr. Baker :

Q. You can give an exhibit of the local and through business
done by the load, in accordance with the definition that you
have made of local and through business ? A. Yes ; I can do
that.

Q. From the books already prepared ? A. Yes ; I can do it.

By Mr. NoYES :

Q. Would not those two first questions if answered as you
thitik they can be answered, taken from the whole business
of the road, leave what Mr. Sterne would want, and what the
Committee would want? A. I think it would, if I can give it
just as those questions are put.

By Mr. Sterne :

Q. You stated that one of the reasons for the difference in
the cltis-iificatioii is the increased value of the commodities
which are placed in the higher class, and hence the increased
risk to the company ; would not that risk be covered by the
rate of insurance ? A. No ; I never heard of any such in-
surance ; I don't think there is any company that does that
kind of insurance.

Q. Well, that is because you choose to be your own in-
surers? A. No, I never heard of a company that insured

3^5

against thefts and cliafage, and breakage, and the various ac-
cidents that we are liable to.

Q. Can yoa state how much in percentage you have paid on
first class freight, on the whole of the traffic, that you have
carried in any one year ? A. No, sir ; I cannot do it.

Q. Is the information accessible ? A. It is not.

Q. You have no record on the books of the corporation
showing how much you have paid for accidents, breakage,
negligence, &c., on first class freight? A. We have not.

Q. Don't you limit your liability by special contracts on
the receipt of the freight ? A. In some cases the liability is
limited.

Q. The greater part of the cases ? A. No ; in very few
cases.

Q. So, the bulk of your first class traffic is carried at the
risk of the railway corporation, under its common law liability
as insurer ? A. Yes, sir.

Q. Can you tell us the average rate on fourth class traffic
from Chicago to New York during the years 1878, 1877, and
1876 ? A. No, sir ; I cannot.

A. Is there any way of ascertaining that, so as to know what
the avei'age rate on that traffic was during those years? A. I
think it would be very difficult, if it were possible at all.

Q. Now last year, within what hmitations was the range of
rates for fourth class from Chicago to New York ? A. It is a
mere matter of memory with me, but I should say that from
about the middle of May until about the middle of September,
the fourth class rate averaged about fifteen cents a hundred ;
it might have been more, and it might have been less ; I can-
not remember.

Q. How much of 15 cents a hundred do you get for the haul
from Buffalo to New York? A. (Af-ter making a computation)
About eight and three-quarter cents per hundred pounds, in-
cluding delivery in the harbor.

Q. The schedule rate from Buffalo to New York on fourth
class was, during the same period, what ? A. I don't re-
membe''.

Q. Do you recognize this tariff as your freight tariff — local
freight tariff (handing witness tariff headed, " Spring Arrange-
ment, 1878 ") ? A. Yes, sir ; but I do not see any fourth class
rate on there, and I will state that we didn't charge on the

326

same class of freight that we made that tifteen cent rate from
Chicago on, any more than a proportion of that rate from
Buffalo.

Q. You didn't charge any more than your proportion of that
rate from Buffalo V A. I don't think we did ; I am only stating
all that I say generally.

Q. How was it from Utica and Syracuse? A. I am not able
to answer you definitely on that ; but our rates were generally
based ou what our Bufialo rate was from all points on the
line.

Q. What was the rate in September, 1878? A. I don't re-
member what it was ; it was changed about the 1st of Septem-
ber, and I thmk it was thirty-five cents ; but I cannot say
positively.

Q. It jumped up from 15 to 35? A. I think it did ; from
15 to 30 or 35.

Q. How long did it remain at that rate ? A. What _> e^ir are
you questioning me on — 1878 ?

Q. 1878 ? A. I don't remember.

Q. Haven't you any means of ascertaining ? A. I presume
I could ascertain.

Q. Will you do so, please ; for what period of time have you^
except that that you have mentioned during the summer of
1878, any definite idea as to what the rates were iu 1878?
A. I don't remember what the rates were for the balance of the
year ; the rates were quite unsteady during the summer of
1878.

Q. Is flour fourth class ? A. Yes, sir.

Q. And that was the rate for flour as well as for breadstuffs,
was it ? A. If the rate for grain was 15 cents a hundred, the
rate for flour would be, say 30 cents a barrel.

Q. That would also majte it 15 cents a hundred ? A. Tech-
nically and accurately, no, because a barrel of flour weighs
more than 200 pounds.

Q. Then it was a little less than 15 cents ? A. That is wha
I say ; we estimate a barrel of flour at 200 pounds.

Q. How much does a freight car weigh ? A. About ten tons.

Q. You misunderstand me; the weight of the car ? A. I tell
you, about ten tons.

Q. Then you haul one pound of dead weight to one poinid
of live weight or paying weight ? A. We get a little more than

327

ten tons in our cars ; I think they will average on grain, per-
haps, twelve tons.

Q. Adding the weight of the locomotive and its tender, you
haul a litlle more dead weight, don't you, than you do live
weight? A. No ; I don't thiuk we do.

Q. You thiuk that on the whole you haul as much live weight
as you do dead weight? A. I am, talking now of grain and
flour ; eastbound freight.

Q. W'e mean the same thing when we talk of live weight and
dead weight ; when we talk about live weight, we mean pajing
weight? A. Yes.

Q. What is the value of a fi eight car — an ordinary box freight
car ? A. I cannot !ell you, the prices have varied so, recently.

Q. Within limitations ? A. About $500.

Q. What is its life ; how long does it last ? A. I cannot tell
you.

Q. That rate of fifteen cents a hundred from Chicago existed
during the month of August, 1878, didn't it ? A. I don't think
it was higher than fifteen cents during August.

Q. During September you say it went up as high as thirty ?
A. I did not saj' positively ; I said I did nob remember ; I think
it went about to thirty cents.

Q. How was it in December, 1878 ? A. I think it was thirty-
five.

Q. What did you get out of thirty cents a hundred for the
distance from Buffalo to New York ? A. Out of thirty cents
we got about seventeen and a half; let me see — if you want
that accurately ; out of thirty cents (figuring) fifteen and a
half.

Q. Was that the highest point it reached in the year 1878 ?
A. Thirty cents ; no ; it reached thirty-five.

Q. Can't you say what the average »ate was during the year ?
A. No.

Q. Can't you tell us, as to duration of time, what the aver-
age was during the year ? A. No.

Q. Can't you tell us what it was during the summer months
of the year, jis compared with the winter months of the year?
A. No ; not accurately.

Q. Well, approximately ? A. I told you once it was about
fifteen cents a hundred — that that was my recollection.

Q. That was until the close of navigation, wasn't it? A. No.

328

Q. Did it go up beyond twenty cents until the close of navi-
gation ? A. Yes.

Q. Beyond twenty-five ? A. I think it did.

Q. Before the close of navigation ? A. Yes.

Q. Now, it appears by the manuscript scliedules whicli Mr.
Goodman furnished that your charge for flour from Buffalo to
New York was thirty -five cents per barrel in August, 1878 ; that
is a larger percentage ; that is, it is more than eight cents a
hundred ; then, in August, 1878, you did uot make a change, as
to Buffalo rates, correspouding with the rates from Chicago?
A. I believe we did ; I don't kuow positively ; I was not at home
in August.

Q. You were not here ? A. No.

Q. If it was not done it was because of your absence ? A.
No ; not at all ; I might not have known it it I had been
here ; that is a matter of detail which was left to Mr. Good-
man, I believe, following our general rale and general system
that the rate would have been reduced from Buffalo in some
way specially, or otherwise.

Q. Then you consider the demands of Buffalo, Utica,
iSoheuectady and Rome satisfied by the special i ate as well as
by the schedule rate? A. Yes; it was impossible for us to
make a tariff For our local line based upon through rates, be-
cause we did not know what the through rates were going to
be, and when we knew they were to a degree settled, our rule
was to reduce our local to meet it.

Q. Not by a schedule, but by special rates? A. Doing it
in some special manner, either by special rate, or by special
tariffs, or something else, special notice; the detail of the
business I do not know, and I cannot swear to how it was done.

Q. Are the rates to and from Cincinnati the same as to and
from Chicago ? A. Not under the rule.

Q. But substantially they are, aren't they? A. No; not
substantially.

Q. Have they been for a number of years ? A. No ; they
have not been to my knowledge, and I do not believe they
have been.

Q. At any time ? A. At any time.

C^. How do they compare ? A. The rate from Cincinnati
would be lower than from Chicago under the rule for making
rates.

329

Q. Would be lower ? A. Yes, sir.

Q. Is not the distance from New York by your line about
the same ? A. As to where ?

Q. As to Chicago and Cincinnati ? A. No ; it is shorter.

Q. How much shorter ? A. I don't remember the distance
now ; I don't know as I have got a table that will tell ; I will
look and see.

Q. I wish you would ? A. (Referring to table.) The distance
by our line to Cincinnati is 884 miles, and to Chicago 963 by
one route and by another 984.

Q. How do your rates on eastward bound freight, from
St. Louis, compare with your rates from Chicago ? A. They
are higher from St. Louis.

Q. How much higher ? A. Sixteen per cent higher.

Q. How much were they higher ; since when have they been
sixteen per cent ? A. About three years, I think ; three or
four years ; I don't remember the exact date.

Q. That is, barring cut rates or special contracts ? A. If a
special contract was made ; I think the same relative differ-
ence would be maintained as a rule.

Q. Is that the distance difference ? A. Yes.

Q. Calculated therefore on mileage ? A. Yes.

Q. All your rates for these points west of New York arc cal-
culated on mileage rates, are they not ? A. Yes.

Q. And that is true, as far west as Colorado, isn't it ? A.
No.

Q. When does it cease to be true, and why ? A. We make
our rates to Chicago or St. Louis, and they, add the rates to
points beyond.

Q. The rates to points beyond being fixed by whatever local
competition there may be between the roads out there ? A.
Being fixed by the roads.

Q. Depending A. I don't say what it depends upon ;

they are fixed by the roads.

Q What is your opinion about it ? A. I can't give you an
opinion on that.

Q. You don't know ? A. I don't know anything, other than
the roads fix their rates and give them to us, and we add them
to our tariff to St. Louis or Chicago.

Q. Do you give rates to points South — -New Orleans, for in-
stance ? A. I think we do.
30

830

Q. All rail rates ? A. If you will let me look at that tariff,
I will tell you (referring to winter arrangement, 1878) ; we do
name rates through to New Orleans.

Q. Is that fixed on a mileage basis ? A. Not all the way
through.

Q. How far is it fixed on mileage, and where does the mile-
age principle end ? A. It ends at Jeffersonville, I tliink.

Q. Where is that? A. Indiana.

Q. And, there again you add the local rate, or rather the
rates of these other western or south-western roads to your
other rates? A. Yes, sir.

Q. And upon what they base their system, you don't
know, and don't care to inquire ? A. No.

Q. How is it as to eastbound ; does the same rule apply ?
A. The same rule applies.

Q. The answers that you have thus far given me apply to
westbound freights? A. Yes, sir.

Q. And the same rule applies to east bound ? A. Yes, sir.

Q. But, you say the western roads fix your rates for you?
A. Coming east ; yes

Q. So that you have not the same privilege on your own
road that you accord to the western roads, aS to western bound
freight ? A. We accord to them the same privilege they give
us ; we make their rates for them, and they make our rates
for us.

Q. You have testified that you do not beyond certain
points ? A.. Certainl}', we do not beyond certain points.

Q. Then does the power to fix rates upon your road also
stop at that point ? A. It does.

Q. Now, let me draw your attention to through traffic —
European trafiic ; rates are fixed at Chicago for Liverpool ?
A. They are.

Q. Through rates ? A. Through rates are named ; I won't
say they are fixed ; they are given.

Q. Are they not adhered to in any given case? A. Yes ; I
believe they are.

Q. Then they are fixed, are they not, for that case ? A. I
don't understand what you mean by the term " fixed."

Q. If I, for instance, go to a freight agent in Chicago for
the purpose of shipping a few quarters of wheat or corn to
Liverpool, and he gives me a rate through to Liverpool and

331

adheres to it aud the goods are shipped under it, tliat rate is
fixed ? A. If that is what you mean by fixing, it is not fixed.

Q. Don't you mean that by fixed ? A. No ; that is not
what I understood you to mean.

Q. What did you understand me ? A. I understood you to
say when you used the term that rates were fixed, that they
were made in Chicago ; they are not made ; they are simply
named and by adding the ocean rate to the inland rate from
the western points to the seaboard ; I speak now only so far as
my own knowlege goes of our road.

Q. According to your understanding of the term, who fixes
the through trafiic from Chicago to Liverpool ? A. The rep-
resentative of a western road knowing the ocean rate, adds
to his inland rate to New York the ocean rate, and makes the
rate through.

Q. Is the through rate invariably the local rate to New York,
adding the rate from New York for ocean freights to Liver-
pool ? A. As a rule it is.

Q. When does it vary ? A When rates are being cut, and
unsteady, and there is no agreement, I presume it is quite
frequent that both are cut.

Q. But there is a special rate named to New York, and an-
other special rate on the freights to Liverpool ? A. Not other
than a special rate would be named to New York to stop at
New York,

Q. Does it not transpire, as a matter of fact, very often, that
you carry freight over your road for European points at rates
almost as low as the rates to New York alone ? A. No, sir.

Q. You are quite certain of that ? A. Yes, sir.

Q. Haven't there been rates named, to your knowledge, from
Liverpool to Chicago, below the schedule freight rates from
New York to Chicago ? A. There has not been anything of
that kind done for two years ?

Q. Two years ago that was done, wasn't it ? A. No, it was
not done at less rates than we took freight from New York at
that time, to my knowledge or recollection.

Q. To your knowledge and recollection, wasn't it done as
low from Liverpool to Chicago as from New York to Chicago ?
A. No ; I never knew of a case in which it was done through
New York.

Q. Then it is true, however, that freight rates are made over

332

other lines than yours to Chicago from Liverpool, and to Liv-
erpool from Chicago at rates below the schedule rates and
freight rates combined ? A. I never knevr that it was so.

Q. You would be surprised to know that there were many
instances of that ? A. No, I would not be surprised at any-
thing.

Q. These rebates and drawbacks are made by the Mer-
chants Despatch Company, as well as by the New York Cen-
tral, aren't they, on freight taken by them ? A. They are
made the same as they would be made by any other freight
line for the New York Central and the roads connecting in
that line.

Q. Does the Merchants Despatch line own its own cars
that run over the New York Central ? A. It does own a large
number of cars.

Q. You do not answer my question : does the Merchants
Despatch line own the cars which are freighted for the Mer-
chants Despatch Company with goods ? A. I will answer that
with an explanation that, practically, they do, but as a matter
of convenience to us we often load their freight — as we do
load their freight ourselves — in our cars, or the cars of other
companies, and use their cars for other freight.

Q. Simply as an exchange ? A. Simply as a matter of con-
venience to save expense.

Q. So there is an exchange between you and the Merchants
Despatch Company, or rather the Merchants Despatch Trans-
portation Company— is that the name of it? A. Yes, sir.

Q. As to the freight cars that are used ? A. There is an
exchange between us and all other roads.

Q. How do you keep account as to whether or not you are
worsted in that arrangement ? A. We keep an account of the
miles the cars run and pay for their use, and all other roads
keep an account of the miles they run our cars.

Q. Confine it to the Mertihants Despatch Company ; you say
you keep an account of the miles that are run by the Mer-
chants Despatch Company's cars which you use and pay them
for their use ? A. We do.

Q. Do they keep an account of the miles that are run ^y
your cars ? A. Certainly not ; they have no reason to ; they
get no earnings from freight ; they do not earn the freight.

333

Q. You did not get my question ? A. "Rxcuse me ; I see
what you are alluding to.

Q. You cannot see until I have finished my question ? A.
Let me explain.

Q. No ; give me an answer, and then you may explain it a
half a day ? A. Well, go ahead.

Q, Do you keep an account, or does the Merchants Despatch
Co., keep au account of the cars that are freighted with their
freight belonging to you, and pay you for the mileage that these
cars run ? A. I shall answer that technically ; they do not
have any freight.

Q. Is that the only answer that you can make ? A. That is
the answer I will give you ; they do not have any freight ;
therefore, they have no need to pay for the iise of cars.

Q. Didn't you tell this Committee a moment ago that you
used their cars, and they used youis? A. I do not think I
said they used ours ; I said we loaded their freight into our
cars, the freight that they secure and bring to our road, but
after it gets to our road it becomes our freight.

Q. How is that ? A. We use our cars to load freight, which
they secure and get to our road, and after the freights get into
our freight house, or is delivered to us, it is our freight, and
not theirs ; we have all the earnings on it.

Q. What part of the earnings do the Merchants Despatch
Transportation Company get?' A. We pay them a percentage
for acting as our agents for securing this freight.

Q. Is that percentage mentioned in this contract? A. It is.

Q. How do they come to have cars on your road if they
have no freight to run on your road ? A. Because it is cus-
tomary for all lines to have cars, and they put cars on.

Q. That custom that you speak of is the custom of what ;ire
called co-operative lines ? A. Exactly.

Q. But this is a non-co-operative company ; you do not re-
ceive any of the earnings, do you— the New York Central
does not — of this Merchants Despatch Transportation Com-
pany ? A. The earnings from commissions ?

Q. Yes ? A. I do not know ; I presume not.

Q.. How is it that you accept cars from the Merchants De-
spatch Transportation Company, and -pa,j mileage on them,
when you have freight cars enough of your own ? A.. We
have not freight cars enough of our own.

334

Q. You have not, westward bound ? A. We have not gen-
erally freight cars enough of our own ; we could not do the
business for all the other roads in the country and furnish cars ;
there is an interchange of cars between all roads.

Q. I have not any doubt about that ; you are not answering
my question ; now, westward bound, haven't you freight cars
enough of your own ? A. Yes, sir ; generally.

Q. Therefore you would not need the cars of the Merchants
Despatch Transportation Co. for yoar west bound freight ? A.
I think perhaps we would ; some of them.

Q. How many cars has the Merchants Despatch Transpor-
tation Go. over your road? A. I don't know exactly.

Q. It does not matter whether you are wrong five cars one
way or the other ? A. Suppose I was wrong 1,0U0 cars one
way or the other, would that matter?

Q. T think it would? A. Then I will tell you I do not
know.

Q. Who keeps the account in your traffic department by vir-
tue of which this Committee may know how many cars the
Merchants Despatch Ti-ansportation Co. runs on your road ?
A. I can tell you to-morrow ; I cannot tell to-day.

Q. Will you give us that information, please ? A. If you
will put it on your memorandum, I will do it.

Q. What is the average earning of one of those cars per
month ? A. I cannot tell you that.

Q. Can you give this Committee that information? A. I
do not believe I can.

Q. Why not ? A. I think we could tell you how much we
have paid them.

Q. Will you give the Committee how much you have paid the
Merchants Despatch Transportation Co. for the year 1878 ?
A. If I can I will.

The ChaIBMAN — Do you mean for the use of cars or percen-
tages ?

Mr. Sterne — I want him to divide it if he can ; how many
cars they have, how much they have paid for the use of cars,
and how much for percentages or commissions?

By the Chaieman :

Q. The contract provides that they shall report daily or

335

monthly ; which is it? A. Monthly, [think ; it is a good while
since I have read it.

By Mr. Sterne :

Q. Did you make the preliminary arrangements by which
this contract of 1874 came into existence ? A. I did not.

Q. Ton do not know, therefore, what motive there was in
making this contract ? A. I think I know that ; yes, sir.

Q. Are you guessing at it or do you know ? A. I know
generally our motive in employing an agent is, to secure his
services, and in this very case it was to secure their services in
procuring freight for us.

Q. This is the only non-co-operative organization which now
runs upon any one of the great trunk lines, isn't it ? A. I can
only speak for the New York Central.

Q. Don't you know as a matter of fact, that all the other fast
freight lines on the other trunk lines have become from non-
co-operative co-operative ? A. No ; I do not know it posi-
tively ; I have been told so, but I do not know it.

Q. And this, therefore, is the only one, according to your
best information, that is not in that position ; are you a stock-
holder in this concern ? A. No, sir.

Q. Can you tell us whether it is organized under the laws
of the State of New York, or 'not ? A. I testified yesterday
that I thought it was an incorporation, but I understand since
by inquiry, that it is a joint stock association.

Q. Can you tell us who the stockholders are ? A. I can
not.

Q. Is there any record kept of the affairs of the Merchants
Despatch Transportation Company, upon the books of your
company ? A. Not that I am aware of, except so far as our
business relations with them .xs an agent.

Q. You are required by this contract to furnish depot
facilities, side tracks, switches, and other conveniences for the
loading and unloading of merchandize, accommodation in the
depot for the clerical and other forces that may be employed
bythe party of the second part in the transaction of its busi-
ness under this agreement in your depots, &c. ; are there
clerks of the Merchants Despatch Transportation Company
who have their office in your office ? A. Yes, sir.

Q. Who is the book-keeper or person in charge of the

336

Mercliants Despatch Transportation Company in your office?
A. We have no book-keeper in our office in charge of their
business.

Q. Who is the book-keeeper of the Merchants Despatch
Transportation Company who has rooms furnished and facili-
ties afforded under this agreement by j'our company ? A. There
are no book-keepers ; there are clerks making way-bills and
keeping those kind of accounts.

Q. Isn't there one who is in charge of the office ? A. There
is an agent.

Q. Who is that ? A. His name is William Geagen, but he
does not have his office there ; his office is at 335 Broadway.

Q. What is the name of the person at your depot who has
charge of the books or tariffs, call them what you please — of
the business of the Merchants Despatch Transportation Com-
pany ? A. I do not know.

Q. You do not know his name ? A. No.

Q. Do you know the names of any of them ? A. Any of the
clerks there ?

Q. Yes. A. I do not.

Q. How many are there? A. I do not know.

Q. Are they in Mr. Goodman's office ? A. No.

Q. Are they in an office of their own? A. These men have
an office in our office in St. fFohn's Park depot ; then they have
an office of their own on Broadway.

Q. They have no office at the Grand Central Depot ? A.
They have not.

Q. I see that you agree to bear the loss in case the property
is lost or damaged — that it shall be pvo rata between the
companies? A. Exactly; that is on the principle that the
freight is ours after it comes into our possession.

Q. The Merchants Despatch Transportation Co. takes no
risk as to freight ? A. No ; we take the risk ; they secure the
freight and have it brouglit to our stations, and from that time
forward it is under our charge.

Q. Do you know what dividends the Merchants Despatch
Transportiition Co. has paid? A. Ten per cent, I believe.

Q. Ten per cent how often ? A. Ten per cent, yearly, paid
quarterly.

Q. Last year ? A. Yes, sir.

Q. And the year before ? A. Yes, sir.

337

Q. Is that the annual dividend ? A. Yes, sir ; it is.
Q. By this agreement you agree that you will not use the
cars of the Merchants Despatch Transportation Company ; that
you pay no attention to ? A. We found it would be very in-
convenient and we could not carry it out.

Q. That part of the agreement you do not carry out ? A.
There is another part that we do not carry out I think there,
that we were to pay them l.\ cents a mile for the use of the
cars ; it was reduced to | of a cent.

Q. When was that reduction made ? A. About two years
ago ; it might be three, I have forgotten now the exact date.

Q. You repair all the cars of the Merchants Despatch Trans-
portation Company, under this agreement? A. I cannot answer
you positively on that point ; it is beyond my department ; I
can only tell you vrhat I believe to be the case.

Q. You agree in the ninth article of this agreement to pay to
the parties of the second part, the Merchants Despatch Trans-
portation Company, such further compensation ^ s may be
agreed upon between you ; under this agreement are there sub-
sequent contracts either verbal or written, entered into by
which additional compensation has been provided for since the
making of this contract ? A. What do you mean ; to increase
the compensation ?

Q. No, to alter or vary the conditions Of this agreement ? A.
No, there is not ; that is, I don't remember anything.

Q. Well, anything in addition to this agreement ? A. I do
not remember anything.

Q. Then, this writteu agreement is, according to your beet
recollection, the embodiment of the whole subsisting agree-
ment? A. It is covered by that agreement; yes, sir; we have
another arrangement with them which is not covered by that
agreement.

Q. What is that other arrangement? A. That they are to
take charge of the foreign freight business from the west, and
solicit and work it up — procure it for us.

Q. What do they get for that ? A. Two per cent.
Q. You deliver to them the foreign freight business from the
west? A. No; on the contrary, it is delivered to us; they
secure it.
Q. They secure it from western points? A, Yes, sir.
31

338

Q. And you carry it eastward, and you pay them 2 per cent,
on that? A. Tes.sir.

Q. And that you do on your own cars without any regard
to these other matters ; that is a special arrangement ? A.
We do it in their cars.

Q. Part of it in their cars, and part of it in yours? A Ex-
actly ; this general arrangement is carried out as to an ex-
change of cars.

Q. Do you replace their cars when they are worn out ; in
other word'^, are you responsible for the whole number of cars
during the whole of the time? A. No; we are not; I will
answer that generally ; they are treated just the same as any
railroad cars would be treated ; if we should break one of their
cars or burn it up, we would be called upon to replace it,
either to them, or to any railroad company, and we treat them
just the same as we do any railroad company in respect to the
cars.

Q. Do they annually furnish you with new cars to take the
place of those that are worn out ? A. I don't know that they
have done anything of the kind.

Q. Then, the cars that they furnished you with io 1874 has
been the only thing in the way of capital that they have put
into this business with you? A. I could not say as to that?

Q. Who could say as to that ? A. I do not know who
could.

Q. Wouldn't you know if they had furnished additional
cars ? A. I might not know it.

Q. You might not, of course; do you? A. I do not know
positively when they put cars in.

Q. Do you know the total number of freight cars owned by
your road ? A. I only know from the reports.

Q. What are t hey ? A. I cannot tell you exactly ; about
16,000.

Q. Can you tell us how many are owned by the Merchants
Despatch ? A. I cannot tell you exactly.

Q. In the 16,000 are the Merchants Despatch cars in-
cluded ? A. They are not.

Q. Can you find out for this Committee whether or not this
Merchants Despatch, since 1874, has furnished any new cars
to take the place of those that were worn out ? A. I could ask
them, I suppose, and they would tell me.

3S9

Q. Has the business of the Merchants Despatch increased
or diminished since 1874 — since the making of this contract ?
A. I think it has increased.

Q. Largely increased? A. Not very; I think after two
years ago that it decreased slightly.

Q. Decreased from the time that you first entered into the
arrangement with them ? A. Decreased — say from the year
before ; decreased — say from three years ago.

Q. That was in the period of general depression ; it must
have decreased very largely in 1876 and 1877, dida't it ? A.
After the pool was made all our business decreased aud theirs
decreased, to some extent, with it.

Q. The pool had the effect of decreasing the volume of your
business, had it? A. Yes, sir.

Q. And increased its income, however, by giving you larger
freights on decreased volume ; is that it ? A. Yes, sir.

Q. Is that true since ? A. How do you mean true since?

Q. Is that true of the condition ever since the pool was
made ? A. It gives us increased earnings as compared with
what we got before the making of it.

Q. But with a decreased volume of business? A. Yes, sir.

Q. That is, you divide more business with your rivals at
Pennsylvania and Baltimore ? A Yes, sir.

Q. And you get more for it ? A. We get more.

Q. Was there a contract in existence anterior to this one
with the Merchants Despatch Transportation Company ? A.
Yes, sir.

Q. Tell us, please, how long has that Merchants Despatch
Transportation Company had contracts with the New York
Central and Hudson Biver Eailroad ? A. When I went on the
road I found them there.

Q. Haven't you taken the trouble to inquire how long they
have been there ? A. I guess they have been there about 20
years ; I do not answer you jaositively.

Q. Can you give to this Committee what they have received
from the New York Central in the past ten years ? A. I do
not think I can.

Q. Can you for the past five years ? A. I cannot ; I pre-
sume it can be produced.

Q. Is not the evidence in your office ? A. I cannot tell you ;

340

it ouglit to be there it the books bave not been lost or de-
stroyed.

Q. For what period of time can you give it ? A. I could
give it for a year or perhaps two years, according to the time
you give me to get it in.

Q. Is there any other organization or individual with whom
you have any contract of the same nature as this with the
Merchants Despatch Transportation Company? A. No; we
have not.

Q. This is the only one ? A. Yes, sir.

Q. Which runs its cars over your line, and which you pay
any percentage on the freight ? A. It is the only one, I
think.

Q. How is the live stock handled by your corporation ; have
yon stock yards ' A. Yes, sir.

Q. Is there any corporation or set of individuals other than
tlie New York Central Railway who handle the live stock for
you? A. There is no corporation, or set of individuals who
transport it ; if you will define what you mean by handling, I
will answer you more definitely.

Q. At either end, who handle it ; who have a contract or
arrangement by which they handle the live stock ? A. There
is a company who have yards at New York, and after we un-
load the live stock, they take charge of it.

Q. Do tliey unload it for you — their hands? A. I don't
think they do ; I am not positive about that.

Q. That company that has a yard ' at New York — what is
the name of it ? A. The Union Stock Yard and Market
Company.

Q. When was that organized? A. I do not know how long
pgo it was organized ?

Q. Was it since or before you became Traffic Manager of the
New York Central Eailroad ? A. I tliink it was before.

Q. Where is the contract made with that corporation? A.
I don't believe there is any contract ; if there is I never saw
it.

Q. Do you know under what arrangement, or what the ar-
rangement is by which that corporation gets the handling of
this live stock and the taking care of it for the New York Cen-
tray Railway ? A. There is no other arrangement than that
which I have referred to, that after we unload the stock they

341

take care of it, and see that it is fed and watered, and, as the
term is, " yarded."

Q. Where is their yard ? A. It is at Sixtieth street ; it runs
from Fifty-ninth to Sixty-first, I think.

Q. On the North River? A. Yes, sir.

\^. Isn't that property that was taken by the New York
Central Railroad Company under its power of eminent do-
main and condemned ? A. I don't know.

Q. Isn't it property that belongs to the New York Central
Railway Company ? A. I believe it is.

Q. Owned by the New York Central Railway Company ?
A. I believe so.

Q. Is that property leased to the Union Stock Yard and
Market Company ? A. I don't know anything of that matter.

Q. Who would know something of that matter ? A. I will
ascertain it, and let you know, if that will be satisfactory.

Q. I wish you would. A. If you will just make a memo-
randum of what you want to know.

Q. Who are the officers of the Union Stock Yard and Market
Company? A. I believe that John B. Dutcher is President
of it.

Q. John B. Dutcher is one , of the directors of your corpo-
ration, isn't he ? A. No, sir.

Q. His name appears on some of your lines ? A. He is a
director of the Harlem corporation.

Q. Who are the others ? A. I don't know as I 'can tell
you.

Q. Isn't it because you dont want to tell me ? A. No, no ;
not because I don't want to tell you ; I will find out and tell
you, if you want to know ; I never inquired into it, and never
took much interest in it, except to know that the yards were
there, and were satisfactory to the b\isiness.

Q. You unload all your cattle that come to New York over
your line by an agreement with that company, at their yard?
A. We do unload our cattle there.

Q. The structures that are there, were they built by the New
York Central and Hudson River Railroad Company to receive
these cattle ? A. I think not.

Q. Do you know anything about it ? A. Only in a general
way ; I don't know anything positively about it.

S4^

Q. What makes you think not? A. I used to hear more or
less talk about it.

Q. In hearing more or less talk about it, couldn't you find out
who the directors were ? A. I did not try ; it was some years
ago.

Q. You don't know who is interested in that corporation ?
A. No, I don't ; I could only guess who is.

Q. Give us the benefit of your guess ? A. I think Horatio
Eeed is one ; he is a shipper of hogs; another man, I tliink, is
Mr. O. H. Tobey ; he is also a shipper.

Q. And some others ? A. And some others ; I think they
are all live stock dealers or shippers.

Q. What do they get for handling these cattle ? A. I don't
know positively.

Q. Are they paid by the New York Central and Hudson
Kiver Railroad Company for handling them ? A. No ; the
cattle are paid for by the owners.

Q. The handling of the cattle is paid for by the owners? A.
What do you mean by handling?

Q. Unloading? A. I have just testified that I believe that
our company unload the cattle.

Q. For taking care of them ? , A. That is included in what
is called the yardage charge.

Q. The yardage charge is part of the charge on the freight
bill of your company, isn't it, and collected by you ? A. No ;
it is collected by them.

Q. Now, what is the proceeding ; suppose I were to receive
from the west 100 head of cattle, do I get two bills — one from
the yardage company and the other from you —before I can
get my cattle? A. It is a matter of detail that I am not
very familiar with, but I think you do.

Q. You charge for the haul aild they charge for taking
care of the cattle at the end? A. Yes, sir; and for the feed.

Q. And has the man who' gets the cattle anything to say on
that point, as to whether he chooses to pay or not for this
yardage ? A. I do not know that he has.

Q. You do not think that he has? A. I do not know
that he has.

Q. You have got an elevator, just constructed ? A. Yes, sir.

Q. Was that constructed by the New York Central and Hud-
son Kiver Railroad Company ? A. Yes, sir.

343

Q. And leased to anybody ? A. Yes, sir.

Q. Since when ? A. It was leased to the present lessee
early this spring ; I cannot give the date.

Q. Who is the lessee ? A. Mr. Twombly.

Q. He is a son-in-law of Mr. William H. Vanderbilt, isn't
he ? A. Yes, sir.

Q. Have you in your office a copy of the lease made with
him ? A. I am not positive, but I do not think I have.

Q. Are there any oLlier arrangements with Mr. Twombly
other than that lease in relation to the elevator? A Nothing;
only what is covered by that agreement or lease.

Q. Where can this Committee ascertain how much the land
and how much the elevator cost the New York Central Rail-
way? A. I don't know ; I will undertake to ascertain, if you
want me to.

Q. We want that information and also a copy of that lease.

The witness produces certain books, which are marked for
identification as follows :

Contract Book, Canada Southern Lino, marked, " Exhibit 1,
June 17, 1879."

Contract Book, New York Central & Hudson River Railroad,
marked, "Exhibit 2, June 17, 187d."

White Line, Central Transit Company's Contract Book,
marked, " Exhibit 8, June 17, 1879."

Red Line Contract Book, marked, " Exhibit 4, June 17,
1879."

(Recess for half an hour).

E. C. Vila>i, being duly sworn, testified as follows :

By Mr. Steene :

Q. What is your position on the New York, Lake Erie and
Western Railroad ? A. General Freight Agent.

Q. How long have you been connected with that railway ?
A. Nearly six years.

Q. You were with it while it was the Erie Railway ? A.
Yes, sir.

Q. And also during the administration of Mr. Jewett, as
Receiver ? A. Yes, sir.

Q. Since you have been with the road has that been your
position— General Freight Agent ? A. Yes, sir.

Q. Had you any experienm as a General Freight Agent
before you went to that road ? A. No, sir.

Q. Had you any experience as Freight Agent at all? A. I
never had occupied any position named Freight Agent.

Q. Have you brought with you the Ireight tariffs and
classification sheets ? A. I have got our local freight tariff
book, and our tbrqugh freight tariff sheet.

Q. For the period named in your subpoena V A. No; I
guess not.

Q. Why not? A. I don't know just what I have got here ;
I have got our local freight tariff' book, which has been in
existence since 1865.

The book referred to produced, and marked for identification
N. Y., L. E. & W. E. K, " Exhibit No. 5, June 17th, 1879."

Q. Your through traffic ? A. I have got our present through
freight tratfic.

Q. Eastwiird or westward bound ? A. Westward.

Q. Where is your eastward bound tariff? A. We don't
have any printed.

Q. You mean by that, that it is fixed not by your road
alone, but by the combination of railways under Mr. Fink's
direction? A. It depends upon where it is from; there are
printed freight tariffs made on eastward bound traffic by the
western roads.

Q. You have heard Mr. Eutter testify upon that point ; on
your road have you substantially the same rule, that the western
road fixes your through rates on through traffic coming east-
ward ? A. Yes, sir.

Q. And that is the reason you fix no rates ? A. Yes, sir.

Q. The western rates are fixed by agreement, with how
many roads, through rates ? A. Four.

Q. Baltimore and Ohio ? A. Yes, sir.

Q. Pennsylvania is another ? A. Yes, sir.

Q. Your road is the third ? A. Yes, sir.

Q. New York Central is the fourth ? A. Yes, sir.

Q. Do you represent your road on the meeting of freight or
traffic managers for the purpose of fixing the westward bound
rates? A. Sometimes.

Q. Upon what basis of division of the pool do you fix those
rates? A. I don't get the idea,

345

Q. Upon what basis of division of the results of the pool, or
rather what is the basis of division of the results of the pool?
A. Uo you mean to ask what percentage of the business our
company gets out of New York under the pool?

Q. Yes, sir; and what its basis is ; how much do you get?
A. It is about thirty-one per cent, I think, in the aggregate,
averaging the four classes.

Q. About thirty-one per cent of the through westward
bound ? A. Yes, sir.

Q. All your earnings — that is, all the earnings of the four
roads on westward bound through traffic, are pooled and put
into the hands of Mr. Fink, and you get that division from
hiuj ? A. Well, the earnings are not put into his hands at all ;
lilr. Fink acts as a commissioner for the pool, to keep the
accounts and notify each road of how the account stands from
day to day.

Q. How, practically is the money divided ? A. They keep
all they get — each road ; the basis of the pool is that these per-
centages are agreed upon, and each road furnishes to Mr.
Fink daily a statement of its business in detail. '

Q. And a check passes from the one that happens to receive
more than its proportion, to the one that receives less? A.
No ; there is no money settlement whatever ; Mr. Fink is
furnished, as I said, every day with copies of all the way-bills
by each load, and he makes up a statement daily, showing the
amount of tonnage, of each class, received by each road, and
what they were entitled to ; at the end of the week he makes a
statement, showing what each road is in excess or deficit of its
percentage ; any road that is in excess should turn over to the
roads in deficit the tonnage that it is in excess ; he makes
those orders.

Q. And then you send instead of money, tonnage ? A. Yes,
sir.

Q. To the road which has not received its proportion ? A.
A little different from that, only to this extent, that the road
in deficit sends for the freight it is entitled to, to the road that
is in excess.

Q. And gets it ? A. Yes, sir.

Q. How would the Baltimore and Ohio, for instance, get its
proportion if there is an excess on the part of your road, and
32

346

a deficit on the part of the Baltimore and Ohio? A. They
would send to our docks for it, and we would give it to them.

Q. And they would cart it off to Biiltimore, and from Balti-
more west ? A. Yes, sir.

Q. Is there any such pool as to east bound freight ? A.
No, sir.

Q. There is one in process of formation, is there not? A.
Yes, sir.

Q. Has not yet been fully formed? A. No, sir.

Q. What percentage are you to get under that ? A. T dou't
know.

Q. What percentage do you expect ? A. I don't know that.

Q. What percentage did you claim ? A. Have not claimed
any that I know of..

Q. You dill not take part in the conference at Niagara Palls?
A. Yes, sir.

Q. You put in no claim for any portion of the traffic ? A.
No. sir.

Q. To whom is it left to determine how much you shall get ?
A. Well, I suppose Mr. Blanchard, my next superior officer,
would be the one that would have charge of that.

Q. Mr. Blanchard is the Vice-President of the New York,
Lake Erie and Western ? A. No, sir.

Judge Shipman — No ; he has not any such office.

Mr. Stehne — What is his office ?

Judge Shipman — Assistant President.

By Mr. Sterne :

Q. On what basis do you get your thirty-one per cent ; on
the amount of your traffic ? A. That was the result of an
award made by Mi". Fink.

Q. What was furnished Mr. Fink by which he could tell
whether you were entitled to thirty-one per cent as against
fifty per cent or twenty per cent ? A. I don't know what
guided him in coming to his conclusions.

Q. You did not aid him in coming to his conclusions by
furnishing him any data as to the amount of your business
compared with other railways ? A. No, sir.

Q. Did anybody from your road ? A. Not that I know of.

Q. Have you the custom of special contracts which has
been developed here, as t(j the New York Central, on your road

347

to local points ? A. Tliat is a pretty broad question ; we make
special rates on our road.

Q. To local points within the State of New York ? A. Well,
from where ?

Q. From New York ? A. We have, I think, a very few.

Q. Have you brought the book of contracts or, the book in
which, special rates are contained? A. Yes, sir.

Q. Let us liave that? (The book is produced.) A. Those
books contain memoranda of all the special rates we have on
the road ; I think those contain all the special rates; 1 think
they do.

Q. Within what period of time ? A. From a year ago last
January, I think it is.

Q. Well, the system of giving special rates has fallen off
very considerably on your road, hasn't it ? A. Yes, sir.

Q. You have discontinued to a considerable degree the
practice? A. Of special rates from New York?

Q. Yes, sir ? A. Yes, sir.

Q. Why did you do that ? A. Thouglit it was for our in-
terest to do it.

Q. Did you think it was for the interest of the localities to
which 3'ou run, also to do it ? A. Yes, sir.

Q. Haven't you found your passenger traffic from those
localities largely increased since? A. I don't know.

Q. You are not also the Passenger Traffic Manager of your
road ? A. No, sir ; have nothing to do with the passenger
traffic management.

Q. Then your position does not correspond to the one Mr.
Kutter has, who suprintends both the freight and tlie passen-
ger traffic ? A. No, sir.

Q. What proportion do the special contracts now made by
your railway bear to the special contracts that were made, say
three years ago ? A. Are you referring all the time to special
rates from New York to points on our road?

Q. From New York to points on your road to local points,
from local points to local points, and from local points to New
York? A. From local points to local points; I don't know
that there is any change as compared with three years ago ;
we are making them all the time.

Q. From local points to local points on the line of your road,
you are constantly making special rates ? A. Yes, sir.

348

Q. What proportion of the traffic that you carry on your
road from local points to local points is carried at special rates
compared with what is carried at schedule rates ? A. I don't
know.

Q. Have you never taken the trouble to inquire ? A. No, sir.

Q. Have you any method of arriving at an approximate es-
timate on that point ? A. No, sir.

Q. From local points to New York, how has the custom
that now prevails changed from the custom that prevailed
three years ago ? A. It is the same.

Q. Have you any idea of how much and how far you adhere
to your schedule rates, and when you depart from them ? A.
I know we are making special rates constantly.

Q. From Binghamton, say, aud Elmira ? A. Yes, sir ; all
points.

Q. From Port Jervis ? A. Yes, sir.

Q. From Dunkirk? A. Yes, sir.

Q. From all points ? A. Almost all points.

By Mr. Shipman :

Q. That is from those points to New York ? A. Yes, sir.

By Mr. Steene :

Q. Now, from New York to those points, what is your cus-
tom now, as compared to three years ago ? A. "VVe don't make
but very few in comparison ; we have, as I said before, very
few in existence.

Q. Well, why is it that you have made the change as to
New York, aud not as to other points, either local points or
local points to New York ? A. We did not think it was for
the interest of the company to do it.

Q. How? A. I don't know how.

Q. Then, these books, you say, contain the contracts from
New York and on all local points throughout the State ? A. I
believe these books contain all the special rates we have on
the line of the road everywhere.

Q. Who makes those special rates ? A. They are issued, as
a rule, over the name of Mr. Low, my assistant.

Q. Well, who makes them? A. Well, Mr. Low makes them
with my authority.

Q. What directions do you give Mr. Low upon the subject

349

of special rates ? A. Always to confer with me ,wheu I am
home.

Q. And when you are not at home, to confer with whom ?
A. With Mr. Blanchard, if he does not feel authorized to make
them himself.

Q. Mr. Low has no general authorit}' to make special rates
at all ; he must submit every special rate that he makes to
you or Mr. Blanchard ? A. He should do so always unless he
is fully convinced he ought not make it.

Q. What is his practice oa that point ? A. To confer with
me always.

Q. And when you are not present, to confer always with Mr.
Blanchard ? A. Yes, sir.

Q. So he in point of fact does not make any special rates ?
A. No, sir.

Q. Do you confer with anybody as to the special rates that
are made on you line ? A. Sometimes.

Q. How often do you do that, and in what cases ? A. When
I don't feel competent to decide the matter myself.

Q. You feel, as a general rule, do you not, perfectly com-
petent to decide that matter yourself ? A. Yes, sir.

Q. And therefore a great majority of the special rates that
are fixed on the line of your road, since you have been its
General Freight Agent, are fixed by you ? A. Yes, sir.

Q. What contracts have you running from New York by
special rates to interior points in this State ? A. Well, I could
not say ; I should have to look it up.

Q. How many are there ? A. I should say not ovor half a
dozen.

Q. With what houses are they ? A. I could not say that
without looking them up.

Q. Are they in different lines of trade, or one line of trade ?
A. Oh, in different lines ; they are not all in one.

Q. Is there more than one house in each line of trade ? A.
I could not say that ; I will furnish you with a list of every
one we have if you do not find them in those books.

Q. We want that list.

(The witness produces book marked " Local Contracts, No.
3;" it is marked for identification N. Y., L. E. and W. R. R.,
" Exhibit 6, June 17, 1879 ; " also book marked " Local Con-

350

tracts, No. 2 " ; it is marked for ideutification N. Y., L. E. and
W. E. E., "Exhibit No. 7, June i7th, 1879.")

Q. How long has that tariff been in operation that you have
just brought? A. This went into effect February 21st, 1876.

Q. Haven't you a new tariff to local points ? A. I don't
know, but this is dated 1878, but the same rates were put in
effect before that time ; this is dated February zlst, 1878.

By Judge Shipaian :

Q. You say the rates had been in existence two years
before that ? A. I think they were before that.

By Mr. Steene :

Q. These are the same rates now ? A. I think they are.

Q. And there has been no cliange in the tariff? A. No, sir.

Q. For how many years ? A. This is dated February 21st,
1878, and there has been no change since that time, and I
think the same rate prevailed a year previous to tbat, but I
am not certain about it.

Q. That gives all the local points on your road? A. I be-
lieve it names every point.

Q. And gives the schedule rate? A. Yes, sir.

Q. With that as a guide we can find from your books what
your deviation has been from the schedule rate to the various
shippers? A. Yes, sir.

Q Have you the same custom that prevails in the ofiSce of
the New York Central of shipping all classes at the same rate
under a special contract? A. I think we have one such case.

Q. Have you also cases where you ship different classes —
say first class as second class, or second class as fourth class ?
A. -No, sir.

Q. Or any cases in which you put two classes together ? A.
No, sir.

Q. Youi- present recollection is, that you have but one con-
tract in which the classification is wiped out ? A. Yes.

Q. With whom is that contract, and where is it made? A.
That was with Phelps & Co., at Binghamton.

Q. Hardware firm at Binghamton? A. Yes, sir.

351

By Mr. Shipman :

Q. What is the character of the goods you transport ? A.
Principally fourth class ; nine-tenths of them.

By Mr. Steene :

Q. Wliat is your rate to them ? A. I should have to look
to see ; I think it is sixteen cents a hundred.

Q. That is, for all classes ? A. For all they ship ; but nine-
tenths of their business as I state is fourth class.

Q. How do you know nine-tenths of their business is fourth
class? A. I state it from general knowledge of their bus-
iness.

Q. Not from any inspection of their packages ? A. No, sir.

Q. They might, for aught you know, have consigned to tliem
large quantities of first class goods which they delivered to
other people in Binghamton ? A. They might, but^tbey do
not, I am satisfied.

Q. But you have never inspected their packages? A. Never
in' the world.

Q. What is the rate to Binghamton ; fourth class ; the
schedule rate ? A. Twenty cents.

Q. What is the schedule rate for first class to Binghamton?
A. Forty cents.

Q. And whatever first class they have they get carried for
sixteen? A. Yes, sir.

By Mr. Shipman :

Q. Are those tariffs copies or are they originals ? A. That
is the original that we have in our office.

J. H. Butter's examination resumed :

By Mr. Steene :

Q. Do you know the average earning capacity of a car from
Chicago to New York ? A. It depends upon the rate.

Q. Fixing the rate at twenty cents a hundi'ed, what does it
earn? A. For the trip?

Q. Yes, sir ? A. $50 for fourth class freight ; at twenty
cents a hundred.

352

Q. Is that good interest on the expenditure ? A. On the
expenditure for the car ?

Q. On the expenditure for the haul? A. I could not tell
you.

Q. That is pavt of the series of^ questions which you could
not answei' ? A. Yes, sir.

Q. Who fixes rate on milk ; the milk trafiic of your road ?

A. The present rate was fixed by the President.

Q. Mr. William H. Vanderbilt ? A. Yes, sir.

Q. How long has that present rate been in existence ? A. I
was absent at (he time it was fixed, but sometime in April, I
think, last.

Q. Who fixed the rate that existed immediately prior to tins
rate ? A. That rate was in force when I became connected
with the company.

Q. Haven't you been appealed to frequently to change the
rate ? A. Yes, sir.

Q. You refused to comply with it? A. Yes, sir.

Q. What was the rate ? A. Six cents a gallon.

Q. What is the rate now ? A. Four and a half cents.

Q. How many gallons are there in a can ? A. Ten ; that is
the general can.

Q. What is the weight of a can ? A. I never weighed one.

Q. Don't you know what it is ? A. I don't know positively ;
it is about ninety or a hundred pounds.

Q. Within what radius does the milk come ? A. Our prin-
cipal milk business is done on the Harlem Division.

Q. You are Freight Agent for the Harlem Division as well ?
A. T have the general charge of the traffic of that road ; I am
not the Freight Agent.

Q. I mean the Traffic Manager for the Harlem ? A. Yes,
sir.

Q. You carry some on the Hudson River, too ? A. Very
little.

Q. On the Harlem Railroad, how much do you carry per
night? A. I cannot tell you accurately.

Q. How many cars do yon load? A. About twenty.

Q. How manj' cans do you get into a car ? A. On an aver-
age about 150; I am not answering this positively, because I
never saw a car load of milk loaded.

Q. Assuming, therefore, that your estimate is right— that it

353

is a hundred weight to a can ? A. I did not assume that ;
you assumed that.

Q. You gave me that estimate? A. No; I said about 90
lbs ; from 90 to 100 ; I could not give it to you accurately ;
I don't believe it is 100 pounds.

Q. Assuming it to be a hundred with the cau, you fill your
car two-thirds of its carrying capacity by the milk, do you
not ? A. Two-thirds of its carrying capacity as compared
with ordinary freight.

Q. And each car earns how much money in that way ? A.
45 times 150- $67.50.

Q. What is the distance that you carry that milk ; can you
say ? A. I could not tell you what the average distance is.

Q. AVell, what is the furthest distance — we can calculate the
average distance from that — on the Harlem ? A. About 125
miles.

Q. And your nearest distance ; your last milk point near New
York ? A. Ten or twelve miles, I think.

Q. Don't you carry 200 cans to the car frequently ? A. The
average is about 150.

Q. You do not answer my question ; don't you frequently
carry 200 cans ? A. Then I will answer you by saying I
don't know.

Q. How much does your train eai"n which carries your milk
traffic from New York on the Harlem Koad ? A. Well, pre-
suming the average train to be twenty cars

Q. You have told us the average train was forty ? A. I didn't
tell you that.

Q. You said the trains were made up of forty-five cars ? A.
I didn't tell you that in regard to milk.

Q. Your average milk train is only twenty cars? A.
Yes, sir; but I could not tell you what it averages per car,
because practically it takes very nearly two cars to carry one
car load of milk, and very nearly two locomotives to do it.

Q. Why should that be so ? A. Because we have to run, in
addition to our milk train, an auxiliary train.

Q. Don't you carry passengers on that auxiliary train ? A.
No ; I don't think we do.

Q. None at all ? A. I don't think we do.
Q. Don't you carry other freight on that auxiliary train ?
A. We do carry a little, but we do very little.
33

354

Q. Don't the freight on that auxiliary tiain pay for running
that train? A. I don't think it does ; 1 could not tull you.

Q. Doesn't it come very near it? A. I don't think it does.

Q. Twenty cars, sixty-five dollars each car; is that it? A.
About sixty-five dollars to sixty-seven dollars ; I think I said
sixty-seven dollars and fifty cents it would average ; you please
understand I am not giving yoa the testimony accurately.

'Q. I don't confine you to absolutely correct figures on that;
you have some approximate ideas ou the subject; is that
amount that you charge on milk arrived at by agreement
with other railways ; with the Erie, for instance, and other
railways that centre in New York ? A. I don't know, but I
think not.

Q. Then if they happen to charge the same amount you do
that is a mere accident ? A. I don't think they do charge the
same amount we do ; when our rate was sixty cents they charged
five cents less ; I don't know what they charge now ; possibly
they charge more.

Q. Have you ever estimated how much it costs you to do
that traffic? A. No.

Q. Is there any way by which this Committee can estimate
how much it costs you to do that traffic ? A. I don't know
that there is ; there are some things to be taken into consid-
eration with regard to milk business that differs from any
other business we do.

Q. It is daily, isn't it ? A. Yes, sir.

Q. 365 times a year ? A. I am not positive whether we
run the milk train Sundays or not.

Q. I think you do ; I am infoimed so. A. Then you had
better come on the stand and testify to that.

Q. How many brakemen or employes do you use on each
one of those trains ? A. I think there are three brakemen,
conductor, engineer and firemaii — that is the usual number to
have.

Q. What wages do brakemen get ? A. I don't know ; it is
out of my department.

Q. As to the engineer and fireman the same way? A. I
don't know that.

Q. These cars — the cars you have spoken of — are they not
worth $500 apiece when new ? A. No ; I did not have those

355

cars in mind when I spoke ; they are difterent cars from ordi-
nary freight cars.

.Q What is the vahie when new of a car in which you carry
your mi]k traffic ? A. I could not tell you ; it would be a great
deal more than an ordinary freight car.

Q. Why should that be so ? A. Because it has to be built
with better and different trucks, aad generally constructed dif-
ferently ; it has to have ventilation, and the springs h;ive to
be different ; the trucks have to be different in order not to
shake the milk any more than necessary.

Q. Does it cost as much as a passenger car ? A. No, sir ;
of course not.

Q. Does it cost as much as a Pullman Palace Car? A.
No.

Q. Does it cost one half as much as a passenger car — an
ordinary passenger car ? A. I would not undertake to make
any estimate.

Q. Who makes your milk cars ? A. I don't know.
Q. Who makes your ordinary freight box cars? A. They
are made by different car builders.

Q. That is not definite information, Mr. Eutter ? A. I can-
not tell you all the parties that make them.

Q. Who makes them ? A. The Harrisburg Car Company is
one, Jackson, Woodin & Co. another ; further than that I don't
know ; I don't buy the cars and haven't anything to do with
their purchase.

Q. What is the value of the locomotive that pulls that train ?
A. I don't know.

Q. Is it an ordinary locomotive — anything extraordinary
about it ? A. I think not ; I am not a mechanic ; 1 cannot
tell.

Q. Is there anything in the nature of the business that re-
quires any locomotive to be built of a different character from
those you ordinarily have ? A. I don't think that there is.

Q. Then this business is done at night, is it not ? A. Yes,
sir.

Q,. And the milk is brought here early in the morning ? A.
Yes, sir.

Q. You don't collect the milk from the farmers ; the farmers
bring the milk, do they not, to the depot ? A. They bring it
to the station ; yes, sir.

356

Q. Don't they assist in loading the cars ? k. If the station
is large enough — that is, I mean if the quantity of milk is large
enough to warrant the leaving of a car, the milkman backs up
and puts his milk in the car, otherwise he places it on the
platform and our men do it.

Q. The men who do it are the men you have named con-
nected with the train ? A. Yes, sir.

Q. Now, when it comes here, the milkmen come up and they
get the milk cans out of the car ? A. Our men unload the
cans.

Q. How many men are there to unload the cans ? A. I
don't know.

Q. This whole traffic is put into your cars between certain
hours of the night, and the whole of it removed between cer-
tain hours of the morning again. A. Yes, sir.

Q. So that it does not take up more than a few hours' room
in your station ? A. No, I think not.

Q. Does milk belong to any classification? A. No.
Q. You make that a special traffic ? A. Yes, sir.
Q. It is not included in any class ? A. It is not.
Q. When there is shortage in the cans, do you pay for
shortage ? A. It would depend upon what was the occasion
of shortage.

Q. Is there any appreciable sum of money goes out of the
treasury of your company per annum for shortage? A. I
don't think there is.

Q. Is there any appreciable sum of money that goes out of
your treasury for any damage or loss of milk in the course of
the year? A. I don't think there is, because we take such
good care that there shall not be with this extra train ; that
is what that train is for.

Q. You could not carry, Mr. Depew says ; is he wrong about
that ; more than twenty laden cars on the. Harlem road ? A.
We might possibly carry more than twenty, but I don't think
we could carry forty.

Q, It would not be safe to have a train much lai-ger than
twenty cars, would it? A. It would be safe if the engine
could haul it.

Q. The grade constitutes the difficulty? A. The grade
constitutes the difficulty.
Q. And the grade is much heavier on the Harlem than it is

357

on the Hudson Eiver and New York Central Railroad ? A.
Yes, sir.

Q. How about the grade of the Erie as compared with the
New York Central ? A. I know, generally that the grades are
very much heavier.

Q. And consequently they cannot carry so many freight
cars as you can ? A. I don't know anything about their busi-
ness now.

Q. How is it about the Baltimore and Ohio ? A. I have
not been on the Baltimore and Ohio ; I only know from com-
mon report.

Q. Are the grades very much higher there ? A. I am told
they are.

Q. The Pennsylvania ? A. I am told the same with regard
to that.

Q. Now, to return to the milk ; you say it is a special
traffic ? A. It is a special traffic.

Q. You don't use the term " special " now in the sense of
these special contracts ? A. No ; I do not.

Q. Do you make any special contracts on milk ? A. No.

Q. None at all ? A. No.

Q. With nobody ? A. With nobody.

Q. Why don't you make any special contracts on milk, if
you do on everything else ? A. There is no necessity for it.

Q. They are bound to bring it over your road or not at all ?
A. Oh, no ; we don't carry all the milk that comes from that
part of the country.

Q. All the milk on the line of the Harlem ? A. No we don't,
by a great deal.

Q. How does it go ? A. It is carried across the country and
comes down the river.

Q. How far does that prevail, that it pays to carry it across
and have it come down the river ? A. I don't know the dis-
tance.

Q. During the winter months that cannot be done because
they would have to sled it down the river, wouldn't they ? A.
There is a very short portion of the year that the river is closed,
so that they cannot bring milk from a certain portion of the
river.

Q. How many miles ivould they have to take it by carts to
get it to the river ? A. I don't remember.

358

Q. When yoil speak of a special train, why do you need a
special train — a supplementary train, as you call it? A. Be-
cause if a car should break down on the milk train it would be
necessary to have a car to take its place.

Q. How often does that happen ? A. I could not tell you.

Q. Has it happened at all in the last few years ? A. I don't
know.

Q. Has it ever happened ? A. 1 don't know ; that is a pre-
caution that is taken.

Q. Is that to avoid delay ? A. It is to avoid delay or ruin
to the milk.

Q. When you have delay, do you pay for the loss? A. I
have never had a case of the kind occur, to my knowledge.

Q. You carry cheese — soft cheese — pot cheese, as it is called,
in cans, don't you ? A. I don't know whether. we do or not.

Q. Have you any rate for that ? A. If we carry it, of course
we have a rate.

Q. What is the rate for that ? A. I don't know what that
is ; I don't remember.

Q. That cheese is a little heavier than milk, isn't it ? A. I
never weighed either.

Q. It is put up in a similar sort of cans, isn't it ? A. I
don't even know that.

Q. Have you brought the contract with the American Ex-
press Company ? A. No ; I did not.

Q. What economy is it to the New York Central Railway to
have a company run over its line, doing its express business?
A. I have never entered into that question ; express com-
panies have been running on railroads for a great many years ;
all that principle was settled before I had anything to do with
the New York Central EaUroad ; I could only answer you in a
very general way.

Q. Have you never taken the trouble to inquire whether or
not it has been a profit or loss to your company to have that
relation to the American Express ? A. I think it is a profit.

Q. How ? A. I don't believe the railroad companies could
very adequately do the business ; we would have to have a
separate organization ; we would have to have teams all over
the country ; express companies collect this freight, and they
pay us pretty high rates for the transportation.

359

Q. Do they pay you for the transportation in your own cars ?
A. Yes, sir.

Q. Or do they furnish the cars? A. No; we furnish the
cars.

Q. And make them a part of your passenger trains, do you
not? A. Yes, sir ; sometimes we carry. their express goods in
a baggage car, when there is room in it.

Q. On the Baltimore and Ohio Eoad they have abandoned
the express system, h aren't they ; they do their own express-
ing ? A. I have heard so.

Q. That is because they found it did not pay ? A. I heard
they got ver^' tired of it, too ; wanted to get back to the old
system ; I would like to ask you if that is not so — that several
railroads have undertaken to do their own business, and have
abandoned it ?

Mr. Stebne — Those that have tried it have not gone back
to their own express business. Some may say they have tried
it, but they have never abandoned it.

The Witness — The Erie Road did it once, and they aband-
oned it ; they undertook to do it themselves, but gave it up,
and put it back into the company's hands.

Mr. Steene — That is under a period of time when Mr.
Shipman can best characterize it.

Mr. Shipman — Some eastern roads undertook to run the
express business, and found it a serious expense, and gave it
back to the express companies.

By Mr. Stbkne :

Q. You are also the manager for the passenger traffic ? A.
Yes, sir.

Q. There is a contract in existence, is there not, between
the New York Central Eailway and the Wagner Drawing Room
Car Company ? A. I believe there is ; I never saw it.

Q. Wouldn't you have charge of that? A. I have never
had charge of it.

Q. Was that in existence before you came into your office ?
A. Yes, sir ; whatever the contract or arrangement was ; I
don't know whether there is a contract or not.

Q. You don't know now what the arrangement is between
the New York Central and Hudson River Railroad and the

360

Wagner Drawing Room Car Company? A. I know little or
nothing about it.

Q. Do you know anything about the organization of the
Wagner Drawing Room Car Company ? A. No, sir.

Q. Is the Mr. Wagner, whose name appears in the title of
tij at company, Senator Wagner ? A. Yes, sir.

Q, You say you know nothing about the organization of
that company ? A. Nothing of my own knowledge.

Q. Don't you know whether it is a Joint stock company ? A.
No ; I don't know whether it is a joint stock company or an
association.

Q. Don't know what that companj' earns ? A. No, sir.

Q. Mr. Wagner is related, isn't he, to Mr. Vaiiderbilt, the
President of the road ? A. Not that I am aware of ; 1 should
say, not.

Q. Not by marriage ? A. Not by marriage or otherwise.

Q. Now, this Drawing Room Oar Co. runs how many drawing
room cars over your road ? A. I don't know.

Q. Do you pay them, or do they pay you ? A. Well, I have
stated to you, that I did not know what their arrangement with
the company was, except that 1 generally understand that
they pa) ihe company ; it does not go through my office.

Q. Flow does it come that that does not go through your
office, you being the manager of the passenger traffic ? A. I
don't know ; it was never placed in my hands.

Q. Who would have charge of the particulars of that con-
tract and the books and papers, whatever they are, upon one
side or the other? A. I think the Secretary, being the general
custodian of contracts, would be very likely to have it, if there
is one in existence.

Q. Although you are Traffic Manager of passengers, you
never took the trouble to inquire by virtue of what right Mr.
Wiigner's drawing-room cars run over your line ? A. I never
did ; I found them there when I took my position and they
were never placed in my charge.

Q. You don't determine and have nothing to say upon the
question of how many of his cars shall form a train ? A. I
have not.

Q. Does that contract include drawing room cars as well
as sleeping cars ? A. I don't know.

Q. Don't you know, as a matter of fact, that the Wagner

361

Company or Mr. Wagner furnishes the drawing-room cars as
well as the sleeping cars ? A. I believe that the company of
which he is President, or the association, does furnish them ;
I can say safely that I know it.

Q. Your company don't own any drawing room or sleeping
cars ? A. Not that I am aware of.

Q. Wouldn't you as Traffic Manager for passengers know it
if they dirt ? A. I would be quite likely to know it, i)ut then I
don't know positively.

Q. You don't own any ? A. No.

Q. How many passenger cars do yon own ? A. Pardon me
one minute ; when you say " you," you mean the company?

Q. Certainly ; of course I take it for granted that you don't
own any passenger cars ; are yon a stockholder in the other
company — the Wagner company ? A. No.

Q. I thought possibly your contusion arose from the fact
that you were connected with both comjjanies? A. Oh, no ;
you have undertaken to catch me so frequently that-I have to
be a little technical with you.

Q. Oh, no, no; I want to catch the truth, that is all? A. I
will give you the truth every time, if you will let me do it.

Q. Now, Mr. Rutter, what proportion of the through passen-
ger traffic is done on the drawing-room and sleeping cars, and
what proportion upon your ordinary cars? A. I could not tell
you, sir.

Q. Is there any way in which you can ascertain that ? A. I
don't know whether there is or not.

Q. If there is will you give the Committee the benefit of that
knowledge ? A. If there is anything that I have the power to
get ; I don't think there are any accounts of the company that
show that.

Q. In making up a train for a through point from New York
— passenger train — what proportion do the drawiug-room cars
or sleeping cars bear to the ordinary cars on that road ? A.
That would depend upon what train it was.

Q. I am speaking of a through train ? A. Drawing-room
cars now? Do you distinguish them from sleeping cars ?

Q. First let us have it as to draAving-room cars ; take the
10:30 morning train from the Hudson River Depot ; how is
that made up as to drawing-room cars and your oars ? A. I
don't remember.
34

362

Q. Are there two drawing-room cars to one of your own ?
A. It depends entirely' upon the number of passengers to go
by either.

Q. Do you know beforehand how many passengers go ? A.
No — yes ; we know before the train starts, of course.

Q. You make up your general train, don't you, upon a sup-
posed average traffic "? A. Well, it would depend entirely upon
the season of the year and the travel, as to how many drawing-
room cars we put on.

Q. Well, let us get the season of the year- ; during the sum-
mer montlis, in tlie height of the Saratoga travel, how many
drawing-room cars will start from the Grand Central Depot
on the 10:30 train in the morning? A. I don't remember;
perhaps three or four.

Q. How many ordinary cars ? A. Very likely the same
number.

Q. Now, the Pacific Express in the night — how many sleep-
ing cars start on that — Wagner's sleeping cars ? A. What
do you mean by the Pacific Express ?

Q. Haven't you a Pacific Express? A. We have none
going west.

Q. What do you call your train which starts at 8 o'clock in
the evening? I think it is called the Chicago Express; I for-
get the names of the trains ; there are a good many of them ;
I don't pretend to remember all of them.

Q. On the Chicago Express — how many sleeping cars start
on that, as compared with the cars of your road? A. I won't
answer you definitely ; I would say three or four.

Q. Are there more sleeping cars than ordinary cars ? A. It
would be quite likely, being a night train.

Q. More sleeping cars than cars belonging to the New York
Central Kailroad ? A. I think we have three or four ordinary
— what we call day — cars on that train, and I won't be posi-
tive about the number of sleepers, but say three or four.

Q. The train that starts at 11 o'clock at night, how many
sleepers would that have ? A. I think that only has One.

Q. That is a local train only ? A. Yes, sir.

Q. The Montreal Express has how many ? A. That 11
o'clock train is called the Montreal Express.

Q. Eleven o'clock in the morning ? A. No; 11 at night.

Q. Oh, no ; you have, according to your time schedule, the

363

Montreal Express at 4 o'clock in the afternoon ? A. Yes ;
so called.

Q. Well, that Montreal Express will take how many sleepers
at a point going north? A. I never noticed, but I should say
one.

Q. No, no ; it would take but one going out from New York.
A. That is what I say.

Q. Where would it get the sleeping cars for the night train
to Montreal ? A. I think it would take its sleeping cars from
New York.

Q. Would not it take its sleepers from Albany or Troy V A.
No, I think not ; I am not familiar with those details ; I am
only answering you from general knowledge, and, perhaps, my
judgment a little.

Q. For instance, a train that starts in the morning with
palace cars going westward would drop its palace cars some-
where and take its sleepers ? A. Which train is that ?

Q. For instance, the 10:30 in the morning? A. Yes, sir.

Q. Where would that take its sleepers, at Rochester ? A.
It would take them at Rochester, probably.

Q. How many sleepers would it take there for its western
bound traffic ? A. Take one or two ; I cannot tell you posi-
tively ; one or two by the way of Buffalo, and perhaps as many
by the way of Suspension Bridge.

Q. Can you give to the Committtee any information as to
what the extent of your local passenger traffic is as compared
with your through passenger traffic ? A. I cannot.

Q. Can j-ou ascertain? A. I think I can.

Q. Will you give to the Committee the benefit of that
knowledge? A. I will do so if I can.

The Chairman — That is in relation to passenger traffic ?

Mr. Steene — Yes, sir ; local passenger traffic as compared
with through traffic.

Q. Divide that up, if you please, in the manner you are re-
quested to divide up the freight traffic ? A. If possible.

Q. That is considering Albany and Buffalo as local points
instead of through points ? A. Very well.

Q. You have brought the voucher books, you say ? A. Yes,
sir.

Q. Will you produce them ?

(The voucher books are produced.)

364

Q. In addition to the information that I ask you as to the
passenger traffic, can you give how much of the passenger
traffic goes into tlie drawing-room cars and the sleeping cars ?
A. I told you before that I did not think I could.

Q. Where could we get that information from ? A. I don't
know.

Q, Isn't it in your office in any shape or form ? A. I don't
think it is.

Q. Suppose Mr. "Vanderbilt should ask you the question " I
want to know how much I carry and how much Mr. Wagner
carries," couldn't you find that for him ? A. I don't think I
could.

Q. Are these rebates ? A. They cover all payments.

Q. Drawbacks, rebates and overcharges all the same ? A.
Everything, and I think loss and damages as well.

Q. For the year past? A. Yes, sir ; for whatever time you
told me to bring them ; I forget now.

Q. Give us some clue as to these books ; upon what theory
they are based ? A. All right ; what do you want to know ?

Q. Suppose I want to find out what a special rate was for
a special individual upon a special article ; how would I
get at it ? A. I think the vouchers will tell.

Q. On page 252 of the overcharge book No. 10, which you
brought here in conformity with your subpoena, I find two
items ; one nurnbered 107,382, Union Stock Yard and Market
Company, May 3d, 1877, for yardage in New York on live
stock during the month of April, 1877, as per statement on
file, a number of sheep, a number of calves, a number of cattle,
amounting in all for yardage to $2,184.80; is that a payment
of $2,184.80 by your company to that Stock Yard Company ?
A. Yes, sir.

Q. 5 cents per sheep, 10 cents per calf, 45 cents for each
horned cattle ; is that it ? A. Yes, sir.

Q. Is that the rate that you now pay ? A. I think it is.

Q. That is the company as to which you have testified be-
fore? A. The Union Stock Yard Company?

Q. Yes ? A. Yes, sir.

Q. Now, I find another entry upon the same page, being en-
try No. 107,381, to Western Stock Yards, May 3d, for yard-
age of live stock during the month of April, 1877, as per state-
ment on file, 39,657 hogs at 8 cents, making a total of $3,172.-

365

56 cents ; is that a payment that you made to that yard? A.
Yes, sir.

Q. From the treasury of the New York Central & Hudson
River Eailroad ? A. Yes, sir.

Q. \Vhat yard is that — Western Stock Yards ? A. That is
a yard foot of Forty-fourth street ; 1 think either Fortieth or
Forty-fourth street, North river ; Fortieth street.

Q. Is that on property owned by the New York Central E.
E. Company? A. I don't thiniv it is.

Q. Buildings put up by the New York Central ? A. I don't
think so.

Q. What sort of an organization is that? A. I don't know
who owns it.

Q. You made this voucher; it was made under your author-
ity ? A. It was made in my department.

Q. What agreement or contract have you with these various
stock yards by virtue of which these large sums of money
are paid monthly from the New York Central Eailroad Com-
pany to them ? A. I don't think there is any contract.

Q. You stated before that the stock yards collected their
own bills, and that the amount is not entered on your own
bills ? A. No, sir ; I did not testify to stock yards, I testified
to one and stated that it was on cattle.

Q. I was under the impression that all stock yards collected
their own bills that were connected with your company ? A.
Not OE hogs and sheep.

Q. Now is there any arrangement between the Erie and the
New Yoik Central, by which their stock is turned into the
Union Stock Yard ? A. Not that I am aware of.

Q. Or into the Western 8tockYard? A. Not that lam
aware of.

Q. Or to any other stock yard ? A. Not that I am aware of.

Q. Then in these cases, however, it appears that you have
paid for nineteen horned cattle 45 cents each — $8.55 that must
have entered into your bill? A. It evidently did, I don't re-
member why it was done.

Q. Are there not other instances of the same character in
this book? A. I think not ; there may be ; look at the index.

Q. Have you any memorandum or memoranda which would
give to this Committee how much the payments are per month

366

from tlie New York Central Kailroad Company to the various
stock yards ? A. I have not.

Q. Let me ask you another question ; has the Standard Oil
Company any arrangement with you ? A. Yes, sir.

Q. Similar to that of the Erie V A. I don't know what their
arrangement is with the Erie.

Q. Here is another item, Mr. Eutter cows, 45 cents,
Union Stock Yard, in the month of March, 1877, showing a
payment by your corporation to the Union Stock Yard and
Market Company of $2,118.98 ; that includes sheep and calves
and cows ; then you- must be mistaken are you not as to the
fact that you do not iuclude in your bill these charges? A. I
am positive that we do not when we pay it ; I am positive that
we do not do it.

Q. Why should you pay for other people their yardage to
the extent of $2,118.90 ? A. Because we had to do it to meet
competition.

Q. Then is the yardage included in your freight airange-
ments for live stock ? A. It is on hogs and sheep.

Q. Is it as to cows and oxen? A. I cannot remember why
those small items on those cows were paid.

Q. Now, at the same time as to the Western Stock Yard

A. My knowledge of this matter is of a general character ;
we have an officer of our company who looks after that busi-
ness particularly.

Q. Who is that? A. John B. Catcher.

Q. Now, these books, although designated on their covers
" overcharge," include all cases, do they, within the past year or
three years of rebates and drawbracks by agreement as well as
overcharge ? A. I believe they do.

Q. And all cases of special rate on through traffic ? A. I
believe they include all payments of that character.

Q. And to take one as a sample of the rest — Stand-
ard Oil Company, page 152, drawback on refined oil from
Cleveland to Albany and Troy during the month of March,
1877, as per statement of — something — oil line attached to du-
plicate, resulting in a payment of what amount; tell me; is
this it, $92,316.00 rebate for that month? A. $923.16.

Q. Now, what does this other item, $559.69 stand for ? A.
$559.69 ? that means the proportion that was to be paid by
the Lake Shore & Michigan Southern.

367

Q. Anil yovir proportion was $923.16? A. Yes, sir.

Q. The whole amount of the rebate being $1,482.65 for that
month? A. Yes, sir.

Q. On the shipments from Cleyeland to Albany and Troy,
is that it ? A. Yes, sir.

Q. Now those drawbacks are made by agreement ; the bills
run for the schedule amount and the drawbacks are made by
private agreement, is that it ? A. That is made in accordance
with the general agreement between all the railroads that they
make a rate from the mouth of the pipe to destination uni-
form.

Q. To that company ? A. With all companies, and in
order to make that price uniform for a barrel of oil from the
mouth of the pipe, it was necessary to pay back to a refiner
who shipped his oil to some intermediate point for refining,
making the through rate to all alike.

Q. Well, haven't you an arrangement with the Standard
Oil Company which gives them a rate practically and substan-
tially differing from that of any other shipper ? A. We have no
other shipper but tlie Standard Oil Company, to my recollec-
tion.

Q. Is there any agreement, of a like nature, with anybody
else than with the Standard Oil Company ? A. I don't think
there is any agreement with anybody on the matter of oil, ex-
cept with them.

Q. And that gives to the Standard Oil Company a special
rate fixed by that agreement, doesn't it? A. No, not accord-
ing to the terms of the contract, it does not.

Q. Will you produce that contract with the Standard Oil
Company ? A. I will if I can.

Q. I ask you to produce that ?

Mr. Steene — Now, Mr. Chairman, what shall we do with re-
lation to these books ? It seems to me it is is a hopeless task
to

The Chaibman (interrupting)— We have asked Mr. Vilas to
produce all his special contracts \vith the City of New York.
Now, I think we had better prepare a list of points on the Erie
Eailroad, and ask for the contracts from those points, or pre-
pare a schedule calling for a synopsis of the contracts, and let
officers of the road prepare them and bring them in here.

368

Something ought to be done, of course, iti some way to dimin-
ish the amount of labor. We have got the contract of the
New York Central Eoad, so we have of the Erie ; now all these
books of the New York Central to-rlay have referred to their
through traffic ; all we want to get from that is sufficient in-
formation so as to establish what that practice is.

Mr. Steene — Let me call the attention of the Committee, to
oue item here, which is taken accidentally in opening this
book that I have come across,; on page 40^, Book of Over-
charge No. 10, I find this entry : " D. Dows & Co." that means
David Dows & Co., doesn't it ?

Mr. EuTTER— Yes.

Mr. Sterne — " For rebate to equal Baltimore rate on corn,
from East St. Louis to New York, via E. L. and thence ex-
ported as per papers attached, March the 7th, 102,658,369,"
whatever that means ; "weight 24,110 ; rate at 2| cents ; making
$603.00 ; " is that it ? A. Where do you find these millions
tiiat you are talking about?

Mr. Steene — Here. (Pointing out the item.)

Mr. EuTTEE — Now, Mr. Sterne, you know better than that
if you have got eyes in your head.

Mr. Sterne — Well, give it.

Mr. EuTTEK— That is March, 1877 ; under it March 10
next, car 2,658 ; way bill 369, and you go on and read the rest
if you want to get that before the Committee in that way ; it is
not fair ; the weight is 24,110 pounds of corn.

Q. What is the rebate ? A. The rebate was 2| cents.

Q. How much is the total ? A. 1603.

In response to a direction by the Chairman, Mr. Sterne re-
read the item to the witness as it appeared in the book.

Q. " March 10th, car 2,658, way bill 369, weight 24,110, re-
bate at 2J cents, SeOH. Bill at 30 cents, Baltimore rate, 27|
cents " — 2^ cents difi'erence ; " now that practically placed
David Dows & Co., did it not, upon a par with the Baltimore
shipper ? A. That was the intention.

Q. And he got a special rate to do that ? A. No ; he did
not ; it was a published rate ; I wrote a letter to the President
of the Produce Exchange and announced that we would pay
back the difference between what we charged and what the

369

Baltimore rate was, because we could not tell what tlie Balti-
more rate was when we started the rate, or we would have
done it at that rate, and our intention was to place the New
York merchant in a position where he could export his freight
and get it to New York at the same rate that the exporter from
Baltimore could get it at, and we undertook to do that dnring
*he whole year of 1876.

Q. And you do not do it now ? A. We do not do it now.

Q. Did you d-) it during the whole year of 1877? A. No.

Q. This is in 1877, however ? A. The payment was made
then, but it was not until after that day that the new arrange-
ment was made.

The witness produce the nine overcharge books already re-
ferred to, and they are marked for identification, as follows :

No. 1. N. Y. C, Exhibit 8, June 17, 1879.

" 9. " " " 10,
" 10. " " " 11,

ct 1 0 (c ic a 1 0 a a

" 13. " " " 13,

" 15. " " " 15,

" 16. " " " 16,

Adjourned until Wednesday, June 18, 1879, at 10 a. m.

New Yoke, June 18, 1879, 10 a. m.

The Committee met pursuant to adjournment, aud was called
to order by the Chairman.

Present : All the members of the Committee, except Messrs.
HusTED and Grady.'

Royal G. Vilas' examination resumed :

By Mr. Stekne :

Q. In what book or books are the rebates and drawbacks
paid by the Erie Railway Company ou its through freights,
35

370

entered ? A. Almost all oui- through freight business is done
oy the fast freight lines oyer our road, and they pay all vouch-
ers for overcharges and rebates, and they are kept in their
offices ; we pass upon those monthly, at what we call our
monthly line meetings, in bulk.

Q. A voucher goes from you to the fast freight line, repre-
senting, first, the expenses of the administration of the fast
freight lines ? A. No ; you are not getting it right ; I can ex-
plain it.

Q. I have got a copy of one? A. lean explain it all to you.

Q. Go on, and explain it in your own way? A. If a voucher
is made and paid to A. B. by one of our«fast freight lines, they
present that voucher, with all they have paid during the month,
at what we call our monthly line meetings ; and there they are
examined by all of the general freight agents in interest, and
passed upoii, and if they are passed, the General Freight Agents
simply audit a statement which embraces all of the vouchers
presented at that meeting ; then I make a voucher in my office
for the amount chargeable to our company, simply attaching
to that voucher this certified statement, which is audited at
the line meeting ; so that I do not have in my dfiice a record
in detail oi the vouchers passed at those meetings ; they are
kept by the respective fast freight lines.

By the Chairman :

Q. By fast freight liufs, you mean what ? 4- The Great
Western Despatch, for instance, is one of them over our line ;
the Erie and North Shore Despatch is another.

By Mr. Sterne :

Q. What are the fast freight lines over your road ; mention
tliem all? A The Great Western Despatch, the South Shore
Line ; that is a consolidated line also, comprising the Erie
and Pacific Despatch, the Erie and North Shore Despatch, con-
solidated, the Erie and Milwaukee Line, the Wabash and Erie
Line.

Q. Are those co-operative or non-co-operative lines? A.
Co-operative.

Q. You have heard the testimony of Mr. Eutter on that
point, without repeating what he said, if you coincide with him

as to the distinotioQ between co-operative and non-co-op6rativ6
lines, say so ? A. Yes, sir, I do.

Q. Tliis drawback account — that is what the name of it is,
isn't it ? A. I think our account in our books has a different
name than that ; I think it is called drawbacks and overcharges
combined.

Q. This account originally grew out of, didn't it, your legiti-
mate overcharge account? A. I suppose it did.

Q. That is to say, a man having a regular freight bill at
regular schedule rates, finding that he has been charged more
than the schedule rates, that his goods have been overweighed,
would make a reclamation upon the railway, and would get a
drawback representing that overweight? A. That would not
be what I would call a drawback ; that is the only difference
— it would be an overcharge.

Q. He would get back his overcharge ? A. Yes.

Q. Now, a drawback is an arrangement, isn't it, beforehand,
upon a specified percentage less than the schedule rates at
which the goods are billed to him? A. A drawback is an
amount paid which is less than the schedule rate — a special
rate.

By the Chairman :

Q. Mutually agreed upon ? A. Yes, sir.

By Mr. Stekne :

Q. And that is a regular thing ? A. Yes, sir.

Q. And the freight bill runs to him at the schedule rate ?
A. Generally.

Q. Why does the bill run to him at the schedule rate in-
stead of the actual rate which you charge him? A. We don't
always want the special rate known to the agents and others.

Q. The object being to keep the thing secret between your-
selves and your customer ? A. Yes, sir ; and from our com-
petitors.

Q. That drawback account on your through freights has a
regular place upon your books, has it not? A. On the books
of the company ?

Q. Whenever I speak of your books I assume that they are
the books of the company ? A. I keep no books in my depai t-
ment.

372

Q. The Auditor, Mr. Little, would have that upon his books,
would he? A. Yes.

Q. Where are the vouchers which these freight lines bring
to you? A. They are retained by the fast freight lines in their
general ofiBces.

Q. These several fast freight lines whose names you have
given us have tlieir offices distributed all about the city ? A.
There is only one of them that lias its general office here in
New York.

Q. The money ultimately comes from the company, doesn't
it? A. For our proportion of the claim ?

Q. Well, your proportion from Salamanca to New York? A.
Yes, sir.

Q. Eastward bound freight? A. Yes, sir.

Q. And your proportion from New York to Salamanca on
western bound freight ? A. Yes, sir.

Q. You keep no record by which you can justify, after you
have paid your voucher, that payment ? A. Yes ; we have a
record which justifies the payment.

Q. How does that appear ? A. Just as I have already
stated, by a certified statement which is presented by the fast
freight liues at each monthly meeting, and there they present
all of the vouchers in detail for examination and approval ;
the General Freight Agents go over them and they are approved
and they certify to this statement, and that statement is at-
tached to my voucher which I make in my office for the total
amount due Irom our company for that month's business.

Q. Does that oeitified statement give you in detail to whom
these rebates are payable b^' the fast freight lines ? A. No,
sir.

Q. Or on what class of business it is payable ? ' A. No, sir.

Q. On what theory it is payable or what contracts ? A.
No, sir.

Q. Then you have no books in your office corresponding
with the books that were brought here yesterday by the New
York Ceutral, showing these special contracts on through busi-
ness ? A. No, sir.

Q. None at all ? A. No, sir.

Q. Didn't I understand you a moment ago to say that the
majority of these contracts were made by the last freight lines?
is it now your opinion that all are made by the fast freight

lines — that the Erie Railroad makes none at all ? A. You
speak of through eastbound traffic ?

Q. Yes ? A. The Erie Company does not make any through
eastbonnd contracts.

Q. These are made, as yon say, by the fast freight lines
which run over the Erie ? A. Yes, sir.

Q. And they have the authority to bind the Erie for these
contracts ? A. Yes, sir ; through the contracts forming the
fast freight line.

Q. Have you any copies of those contracts forming those
fast freight lines, with jonv company ? A. Yes, sir.

Q. Have you brought them? A. Thej^ will be here in a few
moments; I left them at my office last night, and I did not
stop there coming up ; I had them in my pocket yesterday, all
day.

Q. Did you tell the Committee why it was that you gave up
the special contract business out of New York to locaJ points
in the State ? A. I think I said it was because they considered
it for their interest to do so.

Q. How was it your interest to do so ? A. We had been in
the habit of making special rates to such an extent that by
adopting the tariff we did, we brought the business down to
about tiie standard of the special rate.

Q. You brought the business down to everybody ? A. Yes.

Q. And you found that that was a benefit to your road ? A.
We thought it was.

Q. How long is it since you have done that for the City of
New York, to bring business down to everybody at the same
rates ? A. A year ago last Februarj'.

Q. What eifect has it had upon the income of your road,
and upon the general local business of your road? A. I don't
know.

Q. You cannot tell ; it has not had any injurious effect, has
it ? A. No, sir ; I think not.

Q. Wliy is it, then, that you did not adopt the same princi-
ple between the lopal points on 3-our road, say between Bing-
hamton and Elmira? A. AYe do adopt about the same princi-
ple, excepting that between the local points we make a few
more special rates, owing to the fact that our local tariff book
is a very ol I one, made some fourteen years ago, and it neces-
sitates more special rates at this time.

Q. But you might revise that upon some sort of an equita-
ble basis, couldn't you ? A. We are doing that now.

Q. And with a view to doing away with the special rates
between various towns ? A. Yes, sir.

Q. And you think that is beneficial even to the interests of
your corporation ? A. To do away with them as much as pos-
sible ; I don't know that we can do away with them entirely.

Q. And you mean to reduce the special rate system ? A.
Yes, sir.

Q. Have you reduced it any as between local points ? A.
No, sir.

Q. Is that because you have not as yet reformed your
schedule ? A. Yes, sir.

Q. And when that schedule will have been reformed, then
you will reduce it ? A. We will reduce the number of special
rates ; yes, sir.

Q. You do a milk traffic also, don't you ? A. Yes, sir.

By the Ohaikman :

Q. Have you got any general rule or principle that you ad-
here to in making these special contracts ? A. As between
local points ?

Q. Yes. A. We have to consider each special case as it is
presented to us, and consider all the bearings of the case.

Q. Youmake the rates without any regard to the schedule
rates to intermediate points ? A. We pay very little attention
to our local tariff book that you have here in evidence.

By Mr. Shipman :

Q. That is the old one ? A. That is the old one ; because it
was made in 1865, and really is not what it ought to be at the
present time.

By Mr. Sterne :

Q. You charge about what the thing will- bear ; is that it ?
A. Yes, sir.

Q. Do you remember what the average rate was in 1878 on
fourth class freight from Chicago? A. No, sir.

Q. Do you remember what the lowest was ? A. No, sir ; I
could not tell you without referring to the oflSce.

375

Q. Do you know what it costs you per ton per mile to
transport goods upon your road ? A. No, sir.

Q. You hflve never taken the trouble to inquire ^ A. No,
sir.

Q. Have you any notion as to where the point is of profit,
and where the point of loss is, in the transportation of goods
on your road ? A. No, sir.

Q. So, when a quantity of freight is offered from the west at
a certain rate, and you accept it, you have no conception as to
whether your corporation makes a profit or a loss on that
haul? A. We don't make any rates on traffic from the west.

Q. In making rates on traffic from New York to the west,
you have no conception as to whether a particular haul is
profitable or otherwise? A. I have some idea of it.

Q. Won't you give the Committee the benefit of that idea ?
A. I think our present tariff on westbound freights probably
pays a profit.

Q. What is that present tariff? A. I have not one with me ;
I will have in a few moments.

Q. You mean the westbound through ? A. Yes, sir.

B3- the Chairman :

Q. Is this that old tariff that you are speaking of ? A. No ;
he is talking about the through westbound tarifi'; the same as
the New York Central tariff, that they had.

By Mr. Stekne :

Q. Do you think that your present rates, or agreed rates,
under the pooling arrangements which ate to go into force,
will pay a profit to the corporation which you represent? A.
I don't know what rates you refer to.

Q. Do you think that your through rates for the past year,
eastbound, have paid you a profit ? A. I don't know.

Q. You have no conception on that ? A. No, sir.

Q. Do you think that your through rates for 1878, east-
bound, from Chicago, have paid you a profit ? A. I don't
know.

Q. You have no conception on that ? A. No, sir.

Q. Do you know as to 1877 that they have paid you a profit?
A. I don't know.

Q. You have no conception on that? A. No, sir.

376 ,

Q. Tour throiigh rates for 1876 ? A. No, sir.

Q. Have you any idea at all as to whether your through
business pays you a profit or loss? A. No, sir ; I don't know.

Q. Have you any means of knowing if yon wanted to know?
A. No, sir ; not in my office.

Q. Is there anybody above you who makes rates and ac-
quiesces in rates? A. I don't think there is any one that
would make them if I was home, without a conference.

Q. So the making of rates is practically, so far as your road
is concerned, in your hands'? A. Yes, sir.

Q. And you do not know what relation a particular rate
bears to the cost of transportation ? A. No, sir ; I never
expect to know-.

Q. And, therefoie, your whole business, both as to through
rates and as to local rates is done upon the principle of what
you can make out of it? A. Yes, sii'.

Q. Where you have no competition, as much as you can ;
where you have competition, as low as you must ; is that it ?
A. No, sir ; not entirely.

Q. If that is not it, what is it ? A. "Where there is no com-
petition we make what we consider fair and just rates ; where
there is competition, of course we have to consider that com-
petition, and make such rates as that competition necessitates.

Q. What is the average earning per car on your line from
Chicago to New York, or from New York to Chicago ? A. I
don't know.

Q. Your cars contain about the same quantity of freight that
the cars of the New York Central do? A. Just about; they
are a little larger, some of them.

Q. Ten tons to a car ; what is the value of those cars ? A.
I don't know.

Q. You do a milk traffic on your road, don't you ? A. Yes,
sir.

Q. What distance does the milk come? A. Do you want an
average distance?

Q. Ygs ? a. I can give you a guess.

Q. Well, give il; — fifty miles? A. Between fifty and sixty
miles I should think was the average.

Q. Have you any special cars for that traffic ? A. Yes, sir.

Q. .Specially made for it ? A. Yes, sir.

377

Q. How do they differ from the ordinary box freight cars ?
A They are more like a baggage car.

Q. What is the expense of a baggage car, do you know ? A.
I don't know.

Q. I? a baggage car as expensive as an ordinary passenger
car? A. I don't know ; I should t^ink not.

Q. What do you charge on your milk traffic per can ? A.
Forty-five cents.

Q. That is how much per hundred? A. It is about 45 cents
a hundred.

By Mr. Shipman :

Q. A hundred pounds? A. Yes, sir; a hundred pounds ; it
is 40 cents.

By Mr. Steene :

Q. How much did you charge recently? A. Fifty-five.

Q. Wasn't it 60? A. Fifty-five.

Q. Sixty cents a can ? A. Fifty -five.

Q. And still further back? A. Fifty-five cents has been the
rate ever since I have been with the company until recently.

Q. How many cars are there to a milk train ? A. I don't
know ; I think they run about 10.

Q. Is that because the traflSc is not any larger' A. I don't
know ; we run two milk trains ; all I know about it is we run
two milk trains, and furnish whatever cars ai'e necessary to
bring the quantity for the shipment.

Q. And that is a traffic that goes on all the year round, day
by day ? A. Yes, sir.

Q. The milk is put upon your cars by the farmers largely,
themselves, isn't it? A. No, sir.

Q. Who puts the milk on your cars ? A. The employees of
our company.

Q. The train hands ? A. Yes, sir.

Q. How many train hands are there ? A. I don't know.

Q. Do you pay them any extra wages above the wages that
train hands receive on the other trains ? A. I don't know.

Q. Do you know what the expense is of a passenger train
running 50 miles ? A. No, sir.'

Q. Do you know what the expense is of your milk trains
running 50 miles ? A. No, sir.
36

378

Q. Have you any idea what the expense is of a train per
dav ? A. Xo, sir.

Q. Have you any idea of what it earns per day ? A. Yes,
sir.

Q. How mucli '? A. Onr milk business I think, pays ns
about SI, -200.

Q. A day ? A. Tes, sir.

Q. Is there any passenger train from BufiFaki to New York
that pays to the Erie Company 81, "200 a day ? A. I don't know.

Q. Hare you any conception whether it is auytbing like as
much ? A. I haven't any idea about it.

By Mr. Shipman :

Q. When you say :^1,200 a day, do yon mean net or gross ?
A. The earnings, I base that on about 3,01)0 caus a day.

By Mr. Steene :

Q. And that occupies about twenty ears, doesa't it ? A. I
think we get in neaily '200 cans.

Q. You get nearly '200 cans in a car? A. Yes, sir.

Q. I'hen your cars are folly hiden as to their capacity for
carriage ? A. I presume they are, generally.

Q. That is, they carry ten tons ? A. They carry ten tons if
they have "200 cans in at a hundred pounds a can.

Q. Is it ten tons ? A. That would be ten tons.

Q. That is the capacity oi your cars ? A. It depends upon
what thev are loaded with ; we could put in fifteen tons of
some kind of freight.

Q. Would not that be overloading them ? A. No, sir.

Q. You do not classify milk in any of your classifications?
A. 1 think not.

Q. Why don't you? A. It is a special trade ; it has liad a
special rate made on it for a great many j'ears, and it has not
been necessary.

Q. Isn't it because you have no competition for that freight
along the hne of your road ? A. No, sir.

Q. Have you a competition as to that along the line of your
road ? A. We have competition from the part of the country
that we get milk from.

Q. Competition how ? A. With the New Jersey Midland
Railroad

379

Q. Tou mean with other railways ? A. Yes, sir.

Q. Don't they all cluirge the same?' A. I don't know.

Q. Is it mere accident that causes you to charge precisely
the same figure that the New York Central does on milk ? A.
I don't think W3 charge the same.

Q. Don't you practically charge the same, ^^dth a difference
of fetching it over to New York? A. We charge forty cents.

Q. And the others charge I'oity-five? A. I believe they do.

Q. Don't the five cents just about represent the cost of
fetching the cans over to New York ? A. I don't know.

Q. The individual milkmen are compelled to go over to
Jersey City ? A. Yes, sir.

Q. You deliver it at Jersey City ? A. Yes, sir.

Q. Therefore the difference is about the difference that that
service represents? A. I don't know.

Q. When the New York Central charged sixty you charged
fifty-five ? A. We have charged fifty-five ever since I have
been with the company until, I think, the 1st day of May.

Q. Mr. Rutter testified that he charged sixty cents ever
since he has been with the company ? A. I don't know what
they charged.

Q. So that there was the same five cents difference ; now,
was there not an agreement between you and the New York
Central as to the rate of charge to be made on milk ? A. I
don't know ; I found that rate when I came to the company.

Q. How did you come to fix it at forty cents ; were you di-
rected to do so? A. I was ordered to do so.

Q. By whom ? A. The President of our company.

Q. Mr. Jewett ? A. Yes, sir.

Q. When was that ? A. I think it was the 1st of May — I
could tell you exactly from the office — or the 1st of June ; I
have forgotten what time it was ; it was this spring.

Q. You get a good deal of your milk, don't you, from the
Wallkill Valley road ? A. No, sir ; we don't get any.

Q. You get some from the Newburgh branch ? A. Yes, sir.

Q. Is that an independent railway ? A. No, sir ; I believe
not ; I don't know whether it is or not.

Q. It is operated by the Erie, is it ? A. Yes, sir.

Q. You operate it ? A. Yes, sir.

Q. Operate it under a lease ? A. I don't know.

380

Q. The financial affairs of your corporation, you don't know
anything about ? A. No, sir.

Q. You confine yourself to tlie freight? A. Entirely.

Q. The form of that voucher that you speak of, is substan-
tially this, isn't it, that you get from the fast freight lines, upon
which you pass (handing witness a paper) ? A. I should say
it was.

Q. To your best recollection, that is a copy of one of your
vouchers ? A. I can give you an exact copy, that I can testify
is a copy, if you want one.

Q. We will have this marked until you can get that ? A.
All right ; do you want me to bring one ? I can give you an
exact one if you say so; one that I can say is a copy ; I can-
not say that that is an exact copy.

Q. If this is an exact copy, assuming it to be so, you would
have paid for the month of October, 1877, on the business of
the Erie and North Shore Despatch Consolidated Company,
drawbacks to the amount of sS,158, for that one month ? A.
Yes, sir.

Q. On the business done over your line alone, that month,
by til at one company ? A. Yes, sir; although the vouchers
passed at that meeting may have been upon business extending
over more than one month ; we cannot always settle up the
claims for one month in the succeeding month ; sometimes they
will run for two or three or four or five months.

Q. Thar would not be so, would it, where the voucher itself
says on its face for the month of October, 1877 ? A. It is for a
settlement made in that month ; but there might be included
in that amount drawbacks on traflSc, two or three, or four
or six months previous ; they make up these claims just as
fast as they can.

Q. Here is a claim, loss and damage, S'268.99 ; now, that is
legitimately the drawback account, isn't it ? A. No, sir.

Q. The loss account ? A. The loss account.

Q. Lighterage, sl,229.96, for the month of October, 1877, on
the business of that one corporation with yours ? A. Yes, sir.

Q. What is that lighterage ; is it to Starin? A. No, sir.

Q. Who IS your lighterer? A. The New Jersey Lighterage
Company, principally.

Q. The Erie Hallway Company doesn't do its lightering
business ? A. Most of it, I think it does.

381

Q. How does it divide tlie business with the New Jersey
Lighterage Company ? A. The New Jersey Lighterage Com-
pany does a portion of our westbound lighterage, and the
Erie Company does entirely, I think, its eastbound lighterage,
with the exception of grain.

Q. Now, what is that organization of the New Jersey
Lighterage Company ? A. I don't know.

Q. Who are in it? A. I don't know.

Q. Who is its President ? A. I think J. B. Gaddis is its
President.

Q. Who are its directors ? A. I don't know.

Q. Who are its stockholders? A. I don't know.

Q. Under whose direction do you act when you give busi-
ness to the New Jersey Lighterage Company? A. The direc-
tion of Mr. Blauchard.

Q. He orders you to give the business to them ? A. We
made a contract with them for doing this lighterage.

Q. Have you ever made any comparison between the cost
to your company of your own lighterage, per ton, and the cost
to your company of the lighterage that is done by the New
Jersey Lighterage Company ? A. Yes, sir ; I think we did at
the time we made the present contract with the New Jersey
Lighterage Company.

Q. Have you any figures anywhere on any book showing
that comparison ? A. No, sir.

Q. From the same distance that you carry this milk, first
class traffic is charged less i-ates, is it not, according to your
schedule ? A. I should have to look at the schedule to know.

Q. Have you any point within 50 miles on your schedule
for which you charge for first class freight any such rate as 40
cents a hundred ? A. No, sir.

Q. That is more, then, than first class ra'es? A. Yes, sir.

Q. How much more ? A. Well, you want to tell me what
point you want our first class rates to.

Q. Say Middletown ; that is about fifty miles from New York,
is it not? A. Sixty-seven.

Q. What is your first class rate to Middletown ? A. From
Middletown to New York, twenty-seven cents.

Q. Now take Goshen ; what is your first class rate from
Goshen ? A. Twenty-six cents.

382

Q. Does it cost you as muoh to handle milk as it does first
class freiglit ? A. I don't know.

Q. Doesn't it cost you less ? A. I don't know.

Q. So you don't know why that special charge is made upon
that special article ? A. T know I was ordered to make it ;
that is all I know.

Q. Can you tell us how many train hands there are to a milk
train of yours ? A. No, sir.

Q. Do you use a supplemental train for milk? A. We have
two trains.

Q. You have two milk trains ? A. Yea, sir.

Q. The one cannot be considered supplemental to the other,
can it ? A. I don't know how you consider it.

Q. The one train is not run for the purpose, of relieving the
other train should it break down ? A. I don't know whether
it is or not.

Q. Both trains carry milk V A. Yes, sir.

Q. And both trains carry about the same loads ? A. I think
they do.

Q. Do you carry cheese ? A. Yes, sir.

Q. In milk cans ? A. Not that I know of.

Q. I mean soft cheese — this pot cheese ? A. I don't know
of its being carried in milk cans.

Q. Isn't it, when it is brought to market, carried in milk
cans? A. I don't know of any.

Q. You don't know anything about that traffic at all? A. I
don't know of its been carried in milk cans.

Q. Wnsn't there an express company which for a time car-
ried milk over your road ? A. I don't know.

Q. Well, don't j'ou know something about this transaction,
that an express company carried milk over your road at a less
rate than your road, and so they were forbidden to do so ? A.
No, sir.

Q. You don't know anything about that ? A. No, sir.

Q. What is the express company that transacts its business
over your road ? A. The United States.

Q. Do they carry milk ? A. No, sir.

Q. Are they permitted to do so, if they see fit ? A. No, sir.

Q. They are not permitted to do so ? A. No. sir.

Q. There is a special arrangement with the express company

383

that they shall not carrj' milk ; is that it ? A. There is an
understanding ; I don't know whether it is a contract or not.

Q. It is an iiaderstanding that they are not to carry milk ?
A. Yes, sir.

Q. When was that understanding made? A. Before I came
to the company.

Q. And it has been kept up ever since ? A. Yes, sir; as far
as I know.

Q. On this voucher is an item of Foreign Agents, 13,847.58,
for the month of October, 1877, as paid to the Erie & North
Sbore Despatch Consolidated Company ; what does that pay-
ment for foreign agents represent ? A. I presume it is the
agents' salaries of the company.

Q. This company has agents iu foreign countries ; or does
the word foreign mean other States ? A. 1 don't know ; that
is the name of the account on our books to which such ex-
penses are charged.

Q. But you pass those monthly vouchers, you say? A.
Yefe, sir.

Q. Then you must know what those monthly vouchers con-
tain, upon the basis of which you authorized your company
to draw a check for $lo,404 for drawbacks, loss and damage,
lighterage and foreign agents ? A. Yes, sir ; that amount is
undoubtedly our proportion of the salary of their agents ; that
account. Foreign Agents, is a name given to that account by
our Auditor.

Q. Is there also an account of Domestic Agents ? A. I don't
know.

Q. Let us understand this voucher ; you paid, nccording to
this voucher, in October, 1877, $13,404, as drawbacks and ex-
penses on the business brought to you by one cf these fast
freight hnes alone, on the business of that month ? A. A.s I
explained to you before, it might have been entirely on the
traffic of that month, and many of these overcharge vouchers
might have been on business previous to that month.

Q. That does not represent any part of the freight earning.s
— that $13,404 ? A. It represents a payment ; if you have a
copy of the entire voucher you will find it stated on the
voucher.

Q. The freight earnings, according to the voucher, were, on

884

eastbound freight, $177,000? A. If that is a copy, I don't
know anything aboiit that being an exact copy.

Q. Coriipare it with the October copy of 1877 ? A. T haven't
it with lue ; according to this voucher, if this is a copy, the
earnings of ou'' company, on eastbound traffic for October,
were $66,291.08.

Q. Brought to you by this one fast freight line ? A. Busi-
ness done by that fast freight Hne.

Q. That does not represent the whole business of your road
at all ? A. No, sir ; just by this one fast freight line ; on west-
bound traffic our earnings were $29,249.08, making a total
amount of $95,540.16 ; that is the total earnings of our com-
pany on the business of the Erie and North Shore Despatch for
that mouth — gross earnings.

Q. And your proportion of the drawbacks, loss and damage,
lighterage, and foreign agents, $13,404? A. Yes, sir.

Q. Is that percentage calculated right on the whole busi-
ness that that took out of your net earnings (referring to the
memorandum in the hands, of the witness) ? A. Yes, sir.

Q. You paid 12-^^ per cent ? A. Yes, sir.

Q. Kepresentiug drawbacks, loss and damage and foreign
agents ? A. Yes, sir.

Q. Now, pray tell us what advantage is it to the Erie Rail-
way Company to have half-a-dozen foreign agents' accounts,
lighterage accounts, less and damage accounts and drawback
accounts, instead of having one represented by your own com-
pany ? A. Well, that is a long story to go on and explain the
system of fast freight lines as they exist.

Q. You think, on the whole, that that is an economy in the
administration of your road? A. Yes, sir.

Q. That voucher is in about the same form in which all the
vouchers appear for all those lines ? A. Yes, sir ; exactly ;
I will give you a coy)y of every one of them, if you want the-n,
for any stated month or any number of months.

Q. Suppose you give us a copy from some month in 1878 ?

Mr. Shipman -Let him give a copy of the vouchers of all
those lines and take that very month in 1877 and the corre-
sponding month in 1878.

Mr. Sterne — Yes, that will do.

Q. What proportion of this drawback account is chargeable
to overcharges by the overweight that the bill represents as

385

compared with the actual weight, and what proportion of it to
a pre-existing arrangement with the shipper? A. Do 'you
mean to ask what proportion of it results from an arrangement
tor a less rate than the waybill rate or schedule rate ?

Q. Yes A. I should say yV^ of it.

Q. Who handles your cattle ? A. The Erie road transports
them ; what do you mean by handling ?

Q. When cattle come from the west or from your local points
to New York, who does the terminal handling of your cattle ?
A. It is done under a contraoi ; I have forgotten whether the
contract is with a company or not.

Q. The Union Stockyard Comp.my? A. No, sir; our cat-
tle are handled in Jersey City.

Q. McPherson ? A. Yes, sir.

Q. Senator McPherson, of New Jersey, isn't it ? A. I am
not sure whether the contract is in his name or in the name of
the company.

Q. But it is known as Senator McPherson's coiitract, isn't
it? A. Yes, sir.

Q. Now, what is that contract ? A. I don't know all of it.

Q. Have you a copy of it in your office ? A. No. sir ; I
think not.

Q. Who has a copy of that contract ? A. I presume the
Secretary of the company.

Q. The Erie Railway Comp my has stockyards ; hasn't it?
A. Yes, sir.

Q. A large place, isn't it, at the northern part — A. Oak
Cliff, it is called.

Q. Are those stockyards used? A. Very little.

Q. You have every facility there, haven't you, for using
them ; you have side tracks in those stockyards ? A. Yes,
sir.

Q. You have sheds and buildings erected there ? A. Yes,
sir.

Q. You have a large amount of property there belonging to
the Erie ? A. Yes, sir.

Q. Substantially, it does no busiaess ? A. Very little.

Q. Where is the business done, and what is the charge
thereon? A. Principally, our live stock is delivered at the
Jersey City yards; I have forgotten the name of the company.

Q. That is McPherson's company ? A. Yes, sir ; and we
37

386

also deliver, if desired by the consignees, on the New York
side, to the New York Central Stockyards.

Q. You don't mean the New York Central Stockyards;
yon mean the stockyards of the Union Stockyard and
Market Company '? A. Yes ; the Union Stockyards and Market
Company ; what I call the New York Central Stockyards.

Q. And that other company ; what is the name of it ; do you
remember ? A. Down at Jersey City ?

Q. No ; it is under the control of the Central people, at
Fortieth street ? A. The old Western Stockyard Company ?

Q. Yes; do you deliver there, too? A. Yes, we deKver hogs
there.

Q. Is that by an arrangement ?

Mr. Shipman — He says it is at the request of the consignees.

The Witness — Yes.

Q. Only at their request you delivered them ? A. That
is all.

Q. All the rest goes to McPherson's yards ? A. Yes, sir ;
unless they wish them delivered at Oak Cliff.

Q. The Oak Cliff yards are your own — are the Erie Stock-
yards ? A. I don't know whether the Erie Company owns
them or not.

Q. If they do not own them, they have been leased to
McPherson, haven't they? A. I don't know about that.

Q. Isn't that your information ? A. Yes ; they formerly be-
longed to the National Stockyaid Company, I think ; that
property there ; but in what shape it is now, I do not know.

Q. In making out your freight bills to shippers of live stock
do you include the terminal charge for handling that live
stock — for yardage ? A. The rates, when made on hogs and
sheep, include the yardage charged — when the rate is made;
for instance, we have a rate of twenty-five cents a hundrea
from Buffalo to New York, or Jersey City, on sheep and hogs,
which includes the yardage charge, and we deliver such ship-
ments free of any charge for yardage ; but on cattle our rates
do not include any terminal charges.

Q. You don't charge eight cents a hog for yardage ; you are
sure of that ? A. Yes, sir ; I am quite positive.

Q. And if that charge is made to anybody, it is an imposi-
tion ? A. I don't know whether it is or not.

387

Q. An imposition on the part of somebody ; not yourself, of
course ? A. I should want to know what the case was.

Q. If you say you do not include it, and people are com-
pelled to pay — A. I don't think any one is compelled to pay
yardage.

Q. If such is the case, it would be an imposition ; it would
be against the directions that you have given? A. Yes, sir.

Q. On cattle you get forty-five cents a head yardage, don't
you? A. I don't know.

Q. How much do you get ? A. I do not know ; we don't
get anything.

Q. Don't you include it in your freight bills? A. No, sir.

Q. Suppose a shipper is ready to take his cattle immediately
upon arrival, i.s he permitted to do so? A. We deliver no
live stock except tlirough the stockyards ; when it goes into
the stockyards it is subject to their regular charges, whatever
they may may be ; I don't know what they are.

Q. Although they may have been there only ten minutes ?
A. I suppose so, if they are not there three minutes. '

Q. And that is a part of your contract with McPberson? A.
I don't know.

Q. That he levies toll on these cattle ? A. I don't think the
contract says he levies toll at all ; I never read the contract
but once.

Q. Practically, that is what it amounts to ; isn't it ? A. I
don't know.

Q. Doesn't he yard hogs ? A. Yes, sir.

Q. Doesn't he yard sheep ? A. Yes, sir.

Q. To whom does he make the charge for yardage, if not to
the shipper or the consignee ? A. To the railroad company.

Q. Then, you have got an account with McPherson, haven't
you, on your books ? A. No, sir.

Q. Showing the amount that is paid to him ? A. Do you
mean on the company's books ?

Q. Yes. A. I make him a voucher every month for the
yardage on small stock.

Q. And the company pays that voucher ? A. Yes, sir.

Q. Where are the records kept of those vouchers, and how
much the company pays to McPherson ? A. I have a record
of every voucher made by me.

Q. Will you bring us information, month by month, for the

388

year 1878, what the yardage is that was paid by the Erie Eail-
way Compauy to Mr. McPherson ? A. I will make a memo-
randum of that.

Q. What other payments are made to Senator McPherson ?
A. T think we pay him for unloading and cleaning the cars.

Q. Cleaning the cars gives him the manure, doesn't it ? A.
No, sir ; I believe not.

Q. Who gets the benefit of the manure in the cars ? A.
I think our company has that.

Q. What makes you think so ; is there any manure account?
A. That is my recollection of it.

Q. Would you not have that account upon your books if
that was so ? A. No, sir ; that I should have to ascertain from
the office.

Q. Will you kindly ascertain as to how that is disposed of?
A. "Yes, sir. Just what information do you want ?

Q. I want to know whether Senator McPherson gets the
benefit of the manure or the company does? A. Perhaps I
can establish that now. [Consulting Mr. Blanchard.]

Q. What does Mr. Blanchard say? A. He thinks it be-
longs to the company.

Q. He thinks it belongs to the company?

Mr. Blanchaed — I know it does.

The Witness — Will that suffice for the information on that
point ?

Mr. Sterne— Yes; I will let it stand that way; has that
been the habit of the company to save that item, or has it
only recently been established ? A. Do you mean previous to
Senator McPherson's contract ?

Q. Previous to Senator McPherson's contract you did your
own yarding, I understand? A. I think it was done under the
National Stockyard Company previous to that time.

Q. Then did the company get the manure ? A. I don't re-
member.

Q. The amount charged for horned cattle, you say. enters
into the bill ; you deliver none to the consignees ; they must
get their delivery from the yard ? A. Yes, sir.

Q. Tell us the process of that business ; how is it done ?
A. Do you mean the delivery ?

Q. Yes ; a man has consigned to him 500 head of cattle by
your road ; he has a bill of lading for the 500 head of cattle ;

389

the cattle men are ready to deliver to hiin at once on their ar-
rival ; you refer him to McPherson— is that it? A. They are
sent right into those yards when we bring them to Jersey City,
if they are not consigned to New York.

Q. So if they go into one side of the yards and come out at
the other side of the yards they pay 45 cents? A. I don't
know what they pay.

Q. Or 40 cents ? A. I don't know what they pay.

Q. They are subject to his charge ? A. Yes, sir.

Q. And the consignee cannot get them until he has paid that
charge ? A. I presume not, unless he has got good credit.

Q. How was the system before that time ; did you ever
deliver to coQsignees cattle that came to this market ? A. They
were always delivered through the stockyards.

Q. But when the stockyards were in your own hands ? A.
I don't know when they were in our own hands.

Q. Never since you were with the company, were they in your
own hands ? A. No ; I think the National Stockyard Company
had our sfockyards previous to the lease to Mr. McPherson.

Q. Who are the National Stockyard Company ; is it another
name for the Erie Railway, or for somebody else? A. I don't
know.

Q. You never took the trouble to inquire ? A. I don't re-
member who the officers were ; I think the National Stock-
yard Company had control of all the stockyards of the Erie
Company.

Q. How many freight cars do you take out and in on an
average freight train ? A. I don't remember just what the
, average is.

Q. Is it as high as the average of the New York Central ?
A. I think not.

Q. Why not ; are your grades heavier ? A. Yes, sir.

Q. A locomotive cannot pull as much? A. I guess not.

Q. Your cars are not as fully laden either ; are they ? A. I
don't know as to that,

Q. What is the average weight that you send out per car
westward bound ? A. From New York?

Q. Yes, they are lighter, arn't they, than the eastbound?
A. I think they are.

Q. What is the average weight? A. I don't know.

390

Q. Eastbound, what is the average weight? A. I could not
tell that with any accuracy.

Q. Can't yon tell this Committee how many cars yon have
on an average- -laden cars, on an average to a train? A. No,
sir ; some parts of the road we can draw more than we can on
other parts of the road ; I don't know whether our annual re-
port shows that or not.

Q. A laden treight train from the west would not change the
number of its cars, until it got to New York ; would it ? A.
Yes, sir.

Q. T\'ould add local cars ? A. No, sir.

(^ How then ? A. We can haul more cars over portions of
our road than we can ove)- other portions.

Q. But how would you get the advantage of that on a train
coming through from ^he west? A. "We would have to split it
up if we had too many to haul over a hill ; if we reached
SuM]uehanna, for instance, with 45 cars on a train, they could
not get up the Susquehanna grade, as we call it, without split-
ting up that train.

Q. Then the probabilities are you would not run 45 cars to
a train, but would only run so many as you could get over the
worst part of your road ? A. I say, I don't know what the
average is ; we haul over a portion of our road just as many
as we can haul over that portion ; when we get to a portion
of the road that we cannot haul as many, we take some out of
that train.

Q. You take some out of that train ; and how do they come
to New York, by extra relay engines ? A. Certainly.

Q. Then you have relay engines at certain points of your
road, which thu New York Central Railroad don't need to
have ? A. I don't know exactly what the needs are of the
New York Central Road.

Q. Mr. Rutter testified that his average train is 45 cars to a
train ? A. I don't know, but our annual report tells us ; I
don't know whether it does or not.

Q. You do not know personally ? A. No, sir.

Q. But you think it is less ? A. Yes, sir.

Q. Do you know anything about the Baltimore A: Ohio?
A. No, sir.

Q. Do you know anything about the Pennsylvania, as to
what they haul ? A. No, sir.

391

Q. Is your local tariff as large as that of the New York Cen-
tral ? A. I don't know ; I should think not.

Q. Is 3'our local tariff half as large as that of the New York
Central ? A. I dou't know.

Q. Are there pooling points between you and the New York
Central to which you both run? A. No, sir.

Q. In the. State of New York ? A. No, sir.

Q. Are there points where you both compete ? A. Yes, sir.

Q. Are not those points covered by an agreement between
you and the New York Central? A. No, sir.

Q. Do not you make the same rates from those points that
the New York Central does? A. We make agreements to
maintain certain rate.", at times.

Q. From those pooling points ? A. From those competing
points.

Q. Do you make special rates from those points, or to those
points? A. No, sir ; not when we liave an agreement to main-
tain agreed rates.

Q. Name these points where you have agreed rates with the
New York Central, to which you do not make special rates?
A. Do you mean eastbound?

Q. Yes. A. I don't know that I could name them all ; there
is Hochester, Batavia, Attica, Le Roy, Caledonia, Hush ; that
is all I can think of now ; I don't know whether we have any
agreement as to Corning or not.

Q. Have you a schedule here which will tell this Committee
what your schedule rates to those points in the State of New
York aie ? A. From New York ?

Q. From New York, and to New York? A From New York
I have.

Q. Why not to New York ? A. We get out no tariff of that
kind on eastbound ; we do not publish a tariff from those
points.

Q. Why not? A. We do not think it necessary ; we advise
the agents, and thej' are in constant communication with all
the shippers ; he posts it up in his office.

Q. He does post it up ? A. He does; they are public rates.

Q. And from those public rates at those points there is no
deviation ? A. No, sir ; not at present.

Q. When was that ? A. I don't know.

Q. Before you made your agreement with the Central? A.

892

No, sir ; sometimes we have no agreement with the Central
about rates.

Q. Have you not an agreement with the Central about rates?
A. Yes, sir ; we have simply sui agreement to maintain the
pry>ent rates in force.

^. And what those present rates are the Committee would
like to know ; how do those rates compare with the rates where
there are ao competitive points ? A. I would have to refer to
the ofiGce.

Q. You understand the bearing of my question ; I have
nothing to conceal from you ; tell me, are not the rates to non-
competitive points higher than the rates to those competitive
points ? A. From New York ?

Q. From New York and to New York ? A. No, sir ; you
have our tariff there in evidence, with the exception as I said
yesterday of a few special rates whioli I am going to furnish
you.

Q. So your rates have recently been made to conform to
competitive points ; have they ? A. On westbound traffic I
have already explained once or twice that we have a tariff
which is there (referring to the exhibit), from New York to all
points on our road, and those rates are open to everybody ;
and we have a few special rates, a list of which I am going to
give you ; now that explains the whole westbound situation ;
now if you want to talk about eastbound separately, why, our
eastbound rat'^s change and vary from time to time.

Q. Your agreement with the New York Central A. We

have no agreement with the New York Central at all.

Q. Your understanding — we don't want to quibble about
words — with the New York Central about maintainig rates,
does it cover the eastbound traffic as well as the westbound ?
A. Our understanding we have with the Central is simply that,
if we want to make a rate from Rochester and those other State
competing points, we generally telegraph up to the Grand
Central Depot, to know if they will agree to such and such a
rate, to take effect next Monday ; they answer yes, and we put
it in effect.

Q. And if they do not say yes you do not put it in effect ?
A. Then we try to put some other rate in effect, if they are not
satisfied with that.

Q. Which they agree to ? A. Whichever rate we agree to.

393

Q. So that there is an uudevstanding between you, isn't
there, as to rate ? A. Yes, when we make it.

Q. Isn't that understanding supposed to exist until you
change it again by a mutual agreement ? A. Yes, sir ; gen-
erally.

Q. You do oil traflSc ? A. Yes, sir.

Q. You have a contract with the Standard Oil Company ?
A. No, sir.

Q. The Standard Oil Company ships no oil over your road ?
A. They do ship a good deal.

Q. They do it without any agreement with your road ?
A. They have an understanding what rates they, are going
to pay.

Q. Where can we get that understanding ? A. It is verbal.

Q. What is the amount of their trafdc ; is it not substantially
the whole of the oil that is carried over your road ? A. Prac-
tically.

Q. How much business do you do in the way of oil per day ?
A. I should have to refer to my office before I could tell you ;
it is a very large traffic.

Mr. Shipman — I can tell what the carriage of the Erie Eoad
and its branches was from April, 1877, to April, 1878, I think.

Mr. Steene — I will take your testimony.

Mr. Shipman — About fifteen millions of barrels.

The Witness — I guess you have got that too much.

Mr. Shipman — I think there was about fifteen million barrels.

The Witness — No, not over the Erie Road.

Mr. Shipman —The Erie Road and branches.

The Witness — No ; I guess that must have been about the
entire oil business to the seaboard.

Mr. Shipman- -That may be ; I may be mistaken about that.

The Witness — On a guess I should say we had about four or
five million barrels that year, but it would be a guess.

Mr. Shipman — My information came with reference to an
entirely different matter ; I know there was the element of
fifteen million barrels, but I guess it was oil that went east
over the Pennsylvania and the Baltimore & Ohio, and over tlie
Central ; I think it was, on the whole.
38

394

By Mr. Sterne :

Q. This amount that Judge Shipman has just mentioned,
fifteen million barrels, was substantially all carried for the
Standard Oil Company ? A. I don't know ; my idea of that
amount that the Judge mentioned, was that it was the entire
oil business to the seaboard for a year.

By the Chairman :

Q. Do you mean this port or the whole seaboard? A. No ;
the whole seaboard.

By Mr. Sterne :

Q. Over your line ? A. No ; over all the roads of the country,
to Baltimore, Philadelphia, Boston, New York, and everywhere
else.

Q. Be the figures what they may, how much of it, as com-
pared with the Central, do you carry ? A. About tjie same, to
New York.

Q. What proportion do you carry for other people than the
Standard Oil Company ? A. There is very little shipped by
anyone else.

Q. What is the agreed rebate paid to the Standard Oil Com-
pany ? A. There is not any rebate paid them at all.

Q. Or agreed drawback ? A. There isn't any drawback paid
to them.

Q. What is the arrangement between your company and the
Standard Oil Companj' ? A. We have no arrangement with
them that I know of except from time to time as to rates.

Q. Y(5u give them a special rate, don't you ? A. Yes, sir. ■

Q. You don't give that rate to anybody else ? A. Yes, sir ;
under the same circumstances, we do.

Q. You mean if they should ship as much as the Standard
Oil Company ? A. If they would make their business as
valuable to us as theirs, we would.

Q. There isu't any other shipper in existence who ships any-
thing like that ! A. I do not know.

Q. Well, you say not ? A. I think not.

Q. So, substantially, that condition cannot be complied
with by any other shipper? A. I do not know ; I have had

395

shippers come to me within the past year and say they would
ship .very nearly as much.

Q. Did you give them the same rate as the Standard? A.
Yes, sir; I told them they could always have the same rate
when they shipped the quantity they expressed.

Q. How long has that rate with the Standard Oil Company
been in existence ? A. What rate ?

Q. Whatever rate it is — special rate ? A. I do not know ; I
should have to refer to my oflSce.

Q. Has it varied within the last few years ? A. Yes, sir.

Q. Didn't it start as a rebate ? A. I think it did.

Q. They had the average rate and you started with them as
a rebate ? A. We paid them rebates at one time.

Q. Didn't it start with Mr. Bostwick ? A. I do not know.

Q. Do you know anything about the contract that Bostwick
made with Jay Gould ? A. No, sir.

Q. As to the carriage of oil ? A. No, sir.

Q. Do you know anything about the contract that was made
by Jay Gould with anybody ? A. No, sir.

Q. By which this Standard Oil business was started ? A.
No, sir ; that was before my time.

Q. What was the condition, when you first found it, of that
business ? A. I do not remember.

Q. Was it then done under the principle of rebates ? A.
My recollection is there were rebates paid to several shippers
when I came with the company.

Q. And the Standard Oil Company got the largest ? A. I
do not remember about that.

Q. Look at your accounts, please, at the time when you first
went with the company and give ns the several rebates that
were paid to the different shippers on oil at that time ? A.
You want a statement of what rebates we were paying at the
time I went with the company ?

Q. Yes.

By the Chaieman :

Q. How long ago was that ? A. The 1st of August, 1873 ; I
do not know whether I can get it.

Mr. Shipman— Is it necessary to go back into all these trans-
actions ?

§96

Q. There Was a contract in existence with the Standard Oil
Company in writing during your administration ? A. I think
there was.

Q. When did that run out ? A. I do not know ; all contracts
ran out when the Receiver was appointed, I believe.

Q. Judge Shipman will correct you as to the law on that ;
when did the other arrangement that you now speak of —
verbal — take the place of that written contract? A. My recol-
lection is, that there has beea no contract since the appoint-
ment of Mr. Jewett as E.eceiver ? A. I know of none since
that time.

Q. Did Mr. Jewett, as Receiver, carry oil at the same rate
that the contract provided ? A. I do not remember.

Q. How can this Committee know ? A. I presume I have a
record of all the rates.

By the Chairman :

Q. When was Mr. Jewett appointed Receiver ? A. It was
in May, 1876.

By Mr. Steene :

Q. Will you fetch those different rates ? A. Since when ?

Q. That the Standard Oil Company has received since the
contract, as you say, has expired, and fetch the contract. A.
I have not got the contract.

Mr. Steene — Mr. Blanchard will fetch it, doubtless, will he
not?

Mr. Blanchaed — You will have to ask the Secretary.

Mr. Steene — The Secretary is under your direction.

Mr. Blanchaed — No ; he is under the direction of the Presi-
dent. I have nothing to do with him.

Mr. Stehne — Who is tlie Secretary ?

Mr. Blanchaed — Mr. A. R. Macdonough.

(The witness produced copies of contract of the Erie Road
with the fast freight lines, which were marked for identifica-
tion Exhibits 1 and '2, June 18, 1879.)

The Chairman — You have established the fact, Mr. Sterne,
have you, that these contracts with the Erie and North Shore

397

Despatch Consolidated and the Great Western are almost
identii-al with the others, so that these are all that are re-
quired ?

Mr. Sterne — I have not shown that fact.

Mr. Shipman — The witness says they are.

Mr. Steene — I will have them compared.

Q. You are familiar with the system known as the Evener
system, ain't you? A. Yes, sir.

Q. Mr. Morris was your Evener, wasn't he ? A. Yes, sir.

Q. Where does he live ? A. Chicago.

Q. Have you a record of what was paid to him in the year
1878? A. I think I have.

Q. Will you kindly bring that ; what is the function of an
Evener? A. Do you want me to go on and explain the
Eveaers ?

Mr. Shipman — You must, under that question, unless the
Committee understand it perfectly.

The Chairman — No, we do not ; go on and explain it.

The Witness — What is known as the Evening system was
started in June, 1875 — I believe I am right — June 21, 1875 ; at
that time the rates for transportation of cattle were very low,
and there seemed to be no way to maintain them except by
some plan to have a set of men appointed to give to the differ-
ent trunk roads their proportion, as they might agree upon, of
the live stock traffic. The trunk lines leading to New York
did agree upon a percentage of the business that each would
be coritent with, and tbey appointed three men, known as
eveners, whose duty it was to see that the percentages agreed
upon were shipped ; it was also the understanding that the
system should extend west of the trunk lines to and including
such points at which the roads leading east from those points
would agree ; and it was also the duty of the eveners to see
that the shipments were made over all of those roads in such
proportions ; and for that service they were to receive the
consideration — I think it was $15 a car, when it was started.

Q. Who were these eveners ? A. Nelson Morris, of Chi-
cago ; S. W. Allerton, and T. C. Eastman, of New York ; that,
in brief, is the evening scheme.

By the Chairman :

Q. You say they received fifteen dollars a car ? A. Yes, sir.

398

Q. Thej received fifteen dollars for handling that car as
commissions ? A- Yes, sir for services.

Q. For the services of seeing that each road received its
agreed percentage of the total amount shipped from Chicago
east? A. Yes, sir; or from any point; for instance, if we
were entitled, we will say, to two hundred and fifty car loads
of cattle this week, and every week, and at the end of the
month we were short of our proportion, shippers had not
shipped over our road say more than two hundred cars every
week, making us two hundred cars short, it was the duty of
those eveners to make the shipments over our road ; if they
had to go and buy the cattle they had to see that our propor-
tion was made up.

Q. So that the roads which have shipped in excess of their
amount turned shipments over to you? A. No, they could
not do that.

Q. Not what they had shipped, but what they should ship ?
A. No ; they had to make the shipment ; a man ships his cattle
just as he pleases ; he could take thBm to the Michigan Central
Eoad in Chicago, and insist upon their being shipped by the
Michigan Central Road, and the Michigan Central Road, if
they were in excess, could not send them over to the Lake
Shore, and decline to take them ; so that it devolved upon the
eveners to see that shipments were made, even if they bought
the stock and shipped them.

By Mr. Shipman :

Q. Suppose your road was deficient 150 carb, they had to
furnish them to you in some way. A. Yes, sir.

Q. If they even bought them ? A. Yes, sir.

Mr. Steene — Bought them or got control of the market by
it? The market was theirs after all.

Mr. Shipman — Not necessarily.

Mr. Stebne — That wa.T> the fact.

The Witness — Oh, no, it was not the fact, because we had
other shippers all the time — large shippers.

By Mr. Bakek :

Q. Isn't it the fact that all shippers do their business
through the eveners ? isn't it a part of their business to see
that cattle do not come forward any faster than the facilities

399

of the road will allow ? A. No ; they had no means of limit-
ing the business.

By the Chairman :

Q. I understand you, they not only received fifteen dollars
a car for all shipments which they necessarily furnished the
railroad, to make up for its shortage, but fifteen dollars a oar
on all cattle shipped ? A. Yes, sir.

By Mr. Sterne :

Q. Did those eveners agree that there should not be any
shortage ; did those eveners agree that they would ship a cer-
tain quantity ? A. No, sir.

Q. Therefore, if you were short, you had no redress on
eveners ? A. Tes, sir.

Q. How? A. They were obliged to make it up.

Q. How ? A. Any way that they saw fit.

Q. If they did not agree, how were they obliged ? A. They
did agree to make it up.

Q. What was their agreement on that point ? A. That they
would see that all shortages or deficits were made up and the
cattle shipped.

Q. If they did not do it, what was the consequence? A,
They did not get their money.

Q. They did not get $15 a ear? A. They did not get any-
thing.

Q. Now, let us understand that ? A. I can tell you.

Q. Suppose that in one week you discovered that the New
York Central got 20 ) cars of cattle, and you but 150, what did
you do to Morris ? A. He was advised every week of the
shipments by each road, and the arrivals in New York by each
road, and a statement showing what road was in excess, if any,
and what road was in deficit, if any.

Q. You did find numerous instances where you were in de-
ficits ? A. Yes, sir.

Q. Did you make no payments to Morris in consequence of
that ? A. No, sir ; not until the business was equalized to our
satisfaction ; if there wa^ a slight discrepancy we would not
decline to pay him.

(^. Brit after the deficiency was again equalized, then you

400

paid Morris, didn't you, upon tbe cars that were short — upon
the cars that were actually shipped whether short or not ?
A. We paid him $15 a car for every car shipped over our
road.

Q. For instance if you got 150 cars this week, and the New
York Central got 200 cars, you would pay him for the 150
cars wouldn't you ? A. Yes, sir.

By Mr. Shipman :

Q. When did you pay him — before the other fifty was
made up, or afterwards ? A. If we had been short our pro-
portions and called upon Morris to make it up, and he declined
to make it up, we would make no payment whatever to him ;
that is what I said.

By Mr. Steene :

Q. Did that ever happen ? A. No, sir ; I think not.

Q. It did not happen at all ; was that part of the contract
with Morris? A. That he should equalize the shipments in
accordance with our agreed percentages ?

Q. Yes? A. Yes, sir.

Q. And that thgre was to be a penalty if he did not? A. He
would not get his money.

Q. Was that understood that he would not get his $15 a car
if it was not equal? A. Yes, sir; I have forgotten whether
there was a contract drawn up at the time or not, but that was
the understanding.

Q. Is there any contract in writing with Mr. Morris, on the
part of your load? A. No, sir, not that I know of; there
was a contract made — an agreement made last August,
which was put in writing, but previous to that time I don't
know that there was one in writing ; that was made with the
three eveners, not with Mr. Morris alone, but with Messrs.
Morris, AUerton and Eastman, by the trunk lines.

Q. Eastman represented more especially the New York Cen-
tral, didn't he ? A. Yes, sir.

Q. AUerton represented the Pennsylvania ? A. Yes, sir.

Q. Those three gentlemen, substantially, did the whole of
the shipments, didn't they? A. No, sir.

Q. How much did they do ? A. I don't know.

401

Q. What proportion of the whole shipment of cattle came
forward to them as consignees? A. I could not say.

Q. Or from them as shippers ? A. No, sir.

Q. Wasn't it more than half? A. I don't think it was, as
far as our road was concerned.

Q. Wasn't it on the whole shipments? A. I don't know
anything about the others.

Q. Don't you know as a matter of fact tliat one-half of the
shipments of cattle— more than one-half of the shipments of
cattle to this port and to eastern ports generally, came to the
Eveners ? A. No, sir.

Q. Yon don't know ? A. No, sir.

Q. Do you know anything about it as to the proportion?
A. It would be a mere matter of guesswork.

Q. Have you the data in your ofiSc« by which you can deter-
mine bow much went to Morris and to Eastman? A. No, sir ;
I can tell you how many cattle have arrived consigned to Mr.
Morris over our road.

Q. Can you tell how many have arrived over your road con-
signed to Mr. Eastman ? A. Yes, sir ; the shipments over our
road I can tell all about.

Q. Then you can tell me how many cattle you have carried
fiom Chicago altogether? A. I don't know as I can tell you
where they came from ; they come to Buffalo from Chicago,
and there they change hands and are sold, and are rebilled
there in such shape that I could not locate any shipment.

Q. What was your rate for cattle per car during the existence
of this evening S3'stem ? A. I don't know that I can tell you
all the time ; I think it was $120 a car from Chicago to New
York.

Q. Wasn't that the highest rate ? A. I think that was the
highest rate in that time.

Q. Wasn't it considerably below that? A. No, not until
lately.

Q. How much was it lately ? A. I don't know.

Q. Why not? A. It was 'very low, I guess.

Q. How much, $50.0, a cftr? A. The lowest rate I have ,
known of was $40.00 a car.

Q. And you paid $15.00 out of that to the Evener ? A. No,
sir; the rates were reduced or became broken, I think, about
the 10th of May, if I recollect right.
39

402

Q. This year? A. Ttis year.
Mr. BiiANCHAKD — ^April?

The Witness— April, wasn't it ? Well, I hare foi^otten ;
April or ilar.

Q. Was that because the Evener system was broken up? A.
It was because it was in an unsatisfactory condition, and -s^e
notified Mr. Morris that we would not pay him any eTenijttg
charge.

Q. What was the reason of that notification ? A. Because
the rates were broken and we were not deriving the benefits
from the scheme that we had been.

Q. Was it broken up generally by the railroads ? A- Yes,
sir.

Q. Did you start the breaking up or did Mr, Yanderbilt's
road start it ? A. Neither one, as I andei-stand it.

Q. Yon broke it np together ? A. Xo, sir.

Q. How was it broken up ? A. I think it was broken by
the Pennsylvania Eoad.

Q. First ? A. Ye.=, sit.

Q. They carried cattle at lower rates than they had agreed
to carry under the evening system? A. I think they gave ikv-
tice that they withdrew fi'om the agreement.

Q. Did that mean that they ceased to pay their money to
theEveiers? A. Yes, sir ; that they withdrew; the agree-
ment with the Eveneis, as T have said, was made last August,
by the Trunk lines, with the three Eveners, and I believe the
Tenusylvania Road withdrew from that agreement this spring •
it was either in April or May — I guess it was in April.

Q. And then you were compelled to withdraw from it ? A.
Yes, sir ; certainly ; the rates were broken down.

Q. And the New York Central & Hudson Biver were com-
pelled to withdraw ? A. I don't know what they did.

Q. Don't you know that they did withdraw ? A. No, sir ; I
don't know anything about it

Q. The rates being broken meant that the rates were lower ?
A. Yes, sir.

Q. Did you get as many cattle over your road as you did
before ? A. I should have to look it up and see.

Q. Have you no impression as to what effect the evening
system 4Tiring its gxigtence, and after it was broken up, had

403

upon the road as to the cattle trade ? A. As to the quantity
shipped ?

Q. Yes. A. No ; I should have to look and see what the
shipments have been.

Q. You have no impression upon that point ? A. My im-
pression is that we got about the same proportion, but it was
only obtained through Mr. Morris, who had been our Evener.

Q. And that without any payment ? A. Yes, sir.

Q. Or rebate? A. Yes, sir ; simply by telling him that we
would give him as low rates as were given by any of our com-
petitors from Chicago, and told him to keep on with his ship-
ments.

Q. Did you give everybody else as low rates as you did Mr.
Morris? A. Yes, sir; everybody; every shipper we had over
our road.

Q. Every individaal ox, or every car load shipped ? A.
They are not shipped except by car load.

Q. Any one shipping a single car load could get the same
rate as Mr. Morris, who ships a train ? A. Yes, sir ; at the
time the rates broke.

Q. You consider that proper economy in your railway ad-
ministration to give to a man that ships a car load as low a
rate as a man who ships a train ? A. No, sir ; not always ; it
depends upon circumstances altogether.

Q. Those are the circumstances under which you thought it
was proper ? A. We thought it was at that time, or we would
not have done it.

Q. How is it now ; what is the rate for cattle ? A. The rate
for cattle now is $90 a car from Chicago to New York.

Q. Is that arrived at by agreement? A. Yes, sir.

Q. With the trunk lines ? A. Yes, sir.

Q. Are there any rebates made from that ? A. There is a
payment made of $20 a car to any shipper who will ship as he
is directed by the railroad companies.

Q. Is that by agreement with the different lines? A. Yes,
sir.

Q. That is practically pooling, isn't it — the shipments? A.
I don't know what you would call it ; it is an agreement.

Q. The object of that agreement, is it not, is to equalize the
shipments between the different trunk lines? A. Yes, sir.

404

Q. And to give the rebate now, instead of to certain individ-
uals, to every shipper? A. Tes.

Q. On condition that he ships as directed ? A. Yes, sir.

Q. And that shipping as directed is to even up ? A. Tes.

Q. What is your rate for a car from Buffalo for cattle ? A.
I think it is §36.00.

Q. I don't mean, now, the cars that run through ? A. No ;
local, from Buffalo.

Q. Local, from Buffalo V A. $46.00 a car ; 23 cents a hun-
dred.

Q. You consider that fourth class traffic? A. No, sir; we
consider it live stock.

Q. Special traffic? A. Yes, sir.

Q. What is your rate fi-om Elmira ? A. I don't know; I
should have to look at the office.

Q. Won't these schedules give it to you that you have
brought here? A. I don't know whether I could find it in
there or not.

Q. Just see whether you can ? A. I don't handle those
books any more than you do ; I don't know much more about
them (the witness consults with one of his associates) ; I am
told that there are no cattle rates in there.

Q. Where are your local cattle rates? A.. I can tell you
from the office ; I can give you any information you want.

Q. We want the local cattle rates. A. From what points ?
you know there is very little shipping from local points ; I can
give you any information you want about it.

Q. From Binghamton, Owego, Elmira, Wellsville ? A. Are
those all the points ?

Q. Yes ; that is about all ; and Oleon ; now, how much,
when it went down to $40 a car from Chicago, did your road
get of the haul ? A. $18.80 from Buffalo.

Q. How much did you say it is now? A. $90.

Q. How much would that leave you ? A. $42.30.

Q. Deducting $20 ; how much was your deduction ? A. 47
per cent of $70 ; we get 47 per cent of the rate from Chicago
to New York on cattle ; it is $90 from Chicago ; we get net 47
per cent of $70 ; that would be $32.90.

Q. $32.90 ? A. Whatever it figures ; it is 47 per cent, of
$70.

Q. You remember we want the information of how much

405

was shipped to these Eveners compared with what was shipped
to all others ? A. You have not stated so.

Q. Will you kindlj' put that down ? A. What is it that you
want?

Q. I want to know how much was shipped to the Eveners as
compared with what was shipped to the rest of the community
over your road? .^ . For what time do you want these ship-
ments ?

Q. For the year 1878, say ; that is just as good as any other
time ; the Evener system was in full blast at that time ? A.
Yes, sir.

Q. $15 a car to each one of those men during the whole
year, wasn't it? A. No, sir.

Q. How much was it? A. $10 part of the time.

Q. What time ? A. The latter part of the time ; I think
from September 2d to December 1st, if I recollect right.

Q. Then it would be well for you to make a break at Sep-
tember and give us the other shipments separately, so that

we can determine what effect A. There is no difference

in the scheme ; the scheme was just the same ; the principle of
the evening system was just the same.

Q. There is probably a difference in the effect upon the
amount of shipments? A. Not the slightest; we got the same
proportion afterwards as we did before ; there was no change
in the percentages at all.

Q. Not in your percentage ; you don't look at it in the same
point of view that I do ? A. I look at it in all points of view,
I guess, and there isn't any difference.

Q. Did you get the same percentage of shipments to East-
man, Allerton and Morris that you did before? A- From
them?

Q. Not from them, they were ail from them ? A. No, sir ;
they were not all from them.

Q. Well, to them? A. Not all to them; we have other
shippers besides them.

Q. I know, but the proportion — did that remain the same
after September ? A. I will give you whatever information
you want.

Q. Well, that you don't know? A. No, sir; you want the
amount shipped to Eveners as compared with others in 1878,
and you want it separated ?

406

Q. I want it separated where yon made your break of $10
as against $15, that you paid before ?

[Intermission.]

Q. Is there a special rate for cattle from Buffalo to New
York? A. No, sir; it is all under this scheme that I have
explained to you.

Q. Does the Evener system include that scheme from Buf-
falo ? A. Yes, sir.

Q. Does the Evener system include Buffalo ? A. Yes, sir.

Q. What points are included by the Evener system ? A.
Buffalo and all points west.

Q. All points west as far as Kansas City and the Colorado
points ? A. Any through point from which the through rates
are made, and agreements made under the system.

Q. I was under ihe impression that it included only from
Chicago ? A. It includes any point where agreements are
made.

Q. How I'ar does that Evener system extsnd? A. Well, the
old Evener system under which we paid the $15.00 per car, and
the $10.L0 per car, last fall, included all shipments of cattle
over our road from Buffalo and any point west of that.

Q. West of Buffalo? A. Yes, sir.

Q. Therefore, cattle coming from Colorado or Texas points
would be included in that system ? A. They would be in-
cluded so far as our payment to the Eveners was concerned.

Q. Whether those Eveners had any personal supervision over
the shipment of those cattle or not ? A. Yes, sir.

Q. Now, the Buffalo point you consider a through point ?
A. Yes, sir.

Q. Did you make any distinction between cattle that were
shipped from the west, stopping at Buffalo, and reshipped
there, or did you include all the Buffalo cattle under the Evener
system ? A. All of them.

Q. Now, suppose a shipment of cattle was made from Corn-
ing to New York, would that come under the Evener system ?
A. No, sir.

Q. They would pay the local tariff rate, would they not?
A. If they had no special rate they would.

Q. Now what, during the year 1878, was the local tariff rate,

407

to your best recollection, for cattle from Corning to New York ?
A. I should have to refer to the office records.

Q. Suppose cattle should stop short of New York, what was
the rate then along the line of your road ? A. From what
point ?

Q. From western points; tell us that first; did that come
under the Evener system ? A. No, sir.

Q. So, anything short of New York, for the supply of local
points, cattle would pay local rates ? A. Yes, sir ; in the
absence of special rates.

Q. And that was appreciably higher, was it not, than through
rates ? A. I think they were a little higher.

Q. Now, suppose cattle were shipped from B'::ffalo to Suf-
fer n

The Chairman — Where is that ? A. Thirty-one miles from
Jersey City.

Q. What would be the rate ? A. From Buffalo ?

Q. Yes, sir ; would it be the local or tlirough rate ? A. It
would be a local rate.

Q. Well, suppose cattle from Chicago to Suffern ? A. They
would be subject to our local rate from Buffalo to Suffern.

Q. You charge a thioagh rate to Buffalo, and the local
rate from Buffalo to Suffern ? A. That would have nothing to
do with the rate west of Buffalo.

Q. When you receive them at Buffalo you charge the local
rate from Buffalo to Suffern ? A. Yes, sir.

Q. Now, cattle shipped from Corning to New York would be
charged the local rate from Corning to New York ? A. Yes,
sir.

Q. You would pay nothing to Eveners on that? A. No, sir.

Q. And what would be the amount per car for cattle from
Corning to New York ? A. I should have to refer to the office
to know.

Q. Will you give us, please, the rates of cattle from Corning
to New York during the year 1878 ? A. Yes, sir.

Q. Schedule rates ? A. If we have got any special rates do
you want those, too V

Q. If there are any particular special rates, we want those
also ; is there a special rate for cattle from Corning to New
York ? A. I don't know.

Q. There may or may not be ? A. Yes, sir.

408

Q. That depends upon application to you, doesn't it ? A.
Yes, sir.

Q. A.ud if such applications have not been made you charge
the schedule rate ? A. Yes, sir.

Q. You have a schedule rate for that ? A. Yes, sir; we have
regular rates.

Q. Suppose through cattle, intended for New York market,
coming from Chicago, stop short on the line of your road for
the purpose of fattening or rest ; did you make, under those
circumstances, any special arrangements with a view to that
contingency ? A. Never in my life.

Q. Do you know of any such cases ? A. From Chicago ?

Q. From any of your through western points, west of the
State of New York ? A. No, sir.

Q. There never were applications made to you for special
rates, under such circumstances ? A. From Buffalo there has
been.

Q. Then, when such applications are made, did you consider
them favorable or unfavorable ? A. Favorable.

Q. That is, you would allow western cattle to rest at
Buffalo, and the same cattle to be shipped as though it were a
continuous shipment to New York? A. Is that the end of
your question?

Q, Yes, sir. A. No, sir ; I can explain that to you ; I have
had applications made from shippers to know what rate I
would make them from Buffalo to New York with the priv-
ilege of stopping them off a}; some point on our line, and
letting them stay fi'om one week to two or three months if
necessary, and I have made two or three such arrangements
within the last two or three years ; I would charge them a rate
from Buffalo to the point at which they wished to stop off',
and with the imderstanding that when they were ready for
shipment, I would make them a rate from that point to New
York, which added to the rate already paid to that point
would not exceed the current rate from Buffalo to New York
except by a small sum ; I think it was fifteen dollars a car.

Q. So that they would have an opportunity of fattening
their cattle on the payment of fifteen dollars a car — their west-
ern cattle? A. I don't know about the western cattle ; I mean
from Buffalo.

Q. Are not Buffalo cattle mainly western cattle ? A. Mainly,

409

Q. Don't the $15 a car represent about the difference per
hundred in the fattened cattle, as compared with the lean
cattle ? A. I don't know ; we get about the same number of
lean cattle in a car, that we do fat ones.

Q. Have you any way by which you can deteruiine western
cattle from cattle bred in the State of New York ? A. No, sir ;
unless they were shipped from local points in New York.

Q. Do you know the schedule rate from Corning eastward ?
A. I haven't it in my mind now.

Q. You can give that to the Committee ? A. Yes, sir.

Q. And you also understand that the Committee want the
rate on cattle which prevailed during the year 1878? A. I
have got a memorandum of what you want, so far ; j^ou want
the tariff and special rates on cattle from Corning to New York
in 1878.

Q. Yes, sir ; and also we want the tariff of rates on western
cattle through to New York? A. From where ?

Q. Anywhere, in the year 1878 ? A. You have not asked
me that before.

Q. The tariff of rates less the $10 or $15, giving us the net
rates in the year 1878, as they have prevailed from time to
time V A. On through cattle ?

Q. On through cattle ; now, the inquiry which I addressed
to you as to Corning — a local point on your road — would be
answered substantially in the same way as to all your other
local points, would it not, without my going over this inquiry
specially, as to those local points ? A. Yes, sir.

Q. Do you know anything about this ; whether it is more
trouble to handle a can of milk than a barrel of potatoes ? A.
I have never handled a can of milk in my life ; I don't know.

Q. Have you ever handled a barrel of potatoes ? A. I may
possibly some time or other ; never as a railroad man.

Q. You don't know whether it takes more labor or trouble or
effort? A. I think you would know more about that than I
do.

Q. Do I look more like a laboring man than you ? A. Fully
as much ; I never handled one.

Q. Do you make special rates to manufacturers along the
line of your road ? A. Yes, sir.

Q. On their goods that they ship to all points ? A. Yes,
sir.

410

Q. Did you do that on the theory of protecting those manu-
facturers and cultivating their business ? A. Yes, sir ; to' a
certain extent.

Q. You consider that part of the business of your corpora-
tion ? A. Yes, sir.

Q. And a legitimate part ? A. Yes, sir.

Q. How do those rates to manufacturers compare with the
rates to others than manufacturers in those particular places ?
A. I don't If now.

Q. Haven't you any conception ? A. They are in the books
here, all the special rates we have got.

Q. You stated that there were three or four special rates to
citizens of New York City now ? A. I guess not.

Q. What? A. No ; I think not ; I did not say so.

Q. How many were there ? A. I said I did not know.

Q. You said there were a very few ? A. Yery few.

Q. What do you call a very few? A. I don't know ; I am
going to have the information for you exactly how many there
are ; and who they are with ; and all about it ; that is being
prepared for you to-day.

Q. Are there any jobbing houses among them? A. Yes, sir;
I think there are.

Q. In what line of business? A The only one lean remem-
ber— I have not been at my ofSce but a minute since I saw
you yesterday — is the one I mentioned yesterday ; Phelps &
Co., of Binghamton.

Q. I am speaking of those from New York City, now ? A.
We have no arrangements that 1 know of with a jobber out of
New York.

Q. I understood you yesterday, to say you had? A. No ; I
was referring to special rates on westbound business from New
York to points on our road, with the consignees ; we make no
arrangements with jobbers ; we make no arrangements with a
jobbing house here in New York for special rates to them.

Q. Have you any rule in your ofBoe, as to what quantity a
shipper must send before getting a special rate ? A. No, sir.

Q. Have you any rule in yonr nfSce as to the canal competi-
tion from Buffalo ? A. No, sir ; we do not make our rates by
rule ; we decide each special application upon its merits.

Q. Upon what you think to be its merits? A. Yes, sir.

Q. Have you any rule, or have you any contract with ship-

411

pers from Buffalo, say where you have oanal competition, that
they will ship by rail all tlie year round ? A. No, sir.

Q. Then the system that prevails witli the New York Cen-
tral Railway does not prevail with you, of having all rail ship-
ment contracts for the year round ? A. I don't know what
prevails with the New York Central.

Q. Then tell me, have you any contracts for special rates
oii the condition that during the summer months the shipper
will send liis goods by your railway, as well as during the winter
months? A. No, sir ; I don't think there is a contract of that
kind in existence on our road.

Q. Was there ? A. I don't remember of there ever being
one since I have been with the company.

Q. How many sets of books are there in the hands of dif-
ferent persons which will show the rebates or drawbacks that
have been paid from schedule rates on eastbound freight dur-
ing the last three years ? A. T have got a record of every
voucher made in my ofSce.

Q. l^ut you have told us these vouchers did not give the
names of the shippers ? A. No, sir.

Q. Or the names of the consignees, nor the amounts to each
consignee ; these vouchers contain, as I understand it, only the
amounts that you have paid severally to these various lines in
lump? A. I answered that question this morning, by saying
that the vouchers paid by the last freight lines were all retain-
ed by them, and were in their possession.

Q. Now, I want an answer to the first question ; how many
offices are there in the City of New fork, where this Com-
mittee can get the information to whom, under what circum-
stances, and what the reasons were lor these rebates or draw-
backs to these individual shippers? A. I can give the reasons
now for every voucher that was ever paid on eastbound bus-
iness ; if you want the vouchers, they are in the hands of the
fast freight lines, and there is only one of our fast freight lines
whose office is in the City of New York.

Q. You say you can give the reasons ? A. I can give the
reasons why we paid them.

Q. Do you undertake to say, that as to this voucher of
October, 1877, you now know the reasons which actuated the
Erie and North Shore Despatch Consolidated Company in
making drawbacks to many sldppers to the amount of $8,158,

412

for tbat month in each individual case ? A. No ; T can say
this

Q. You cannot say that ? A. No ; I cannot.

Q. Can you say that as to any month — as to any of those
through lines to which you paid drawbacks ? A. T saw every
voucher which represents that amount of money there ; I ex-
amine it, or have my chief clerk examine it for me at the time,
and I know that every voucher representing that amount of
money was correct.

Q. Correct in the sense, that an agreement was had for the
drawback? A. Yes, sir.

Q. But what reason actuated these fast freight lines in
making the drawback you cannot determine ? A. They do not
make a drawback ; they do not make a special rate of any
kind which is a deviation from schedule rates except by the
authority of the load originating the business ; tor instance, if
a shipment is made from Chicago of 40,000 bushels of wheat,
and the agreed rate is thirty cents a hundred to New York,
if the rate is made twenty-five cents a hundred it is done by
the authority of the road which starts the business out of
Chicago.

Q. The agreed rate at which the goods are billed, or the
freight bill is made out, is at thirty cents a hundred ? A. Yes,
sir.

Q. And then they are to get a drawback of five cents a hun-
dred ? A. There is no oEficer, or ageut, or employee of the
Erie and North Shore Despatch, who has any authority to de-
viate from a 30 cent rate on his own responsibility ; he must
have the authority of the General Freight Agent of the Michigan
Central Road, for instance, being the North Shore Line ; he
approves that voucher, and the fact that the General Freight
Agent's name is attached to that voucher i-i all the evidence I
want of the correctness of the drawback.

Q. But yon don't impose that drawback exclusively upon the
Michigan Central Road? A. No, sir ; we pro-rate the rate.

Q. You bear your proportion of the diminished rates ? A,
Yes, sir ; you will find that out by reading that printed con-
tract.

Q. Precisely ;now, the Michigan Central Road does notgive
you any reason for that discrimination between that one par-

413

ticular shipper as against another? A. We don't ask any
reason.

Q. You are satisfied that they have their good reasons, and
that is enough for you ? A. Yes, sir.

Q. And, therefore, on what principle, or upon what basis
the Michigan Southern Road does that discrimination you can-
not tell and do not know.? A. Well, I am very apt to know
something about it at the time.

Q. And do you know in each particular cas ■ ? A. No, sir.

By Mr. Shipman :

Q. You can always find out if you want to? A. Yes, sir.

By Mr. Stebne :

Q. Do you, in the same way, determine for the Michigan
Central Road discriminations upon their line? A. We don't
make any discriminations.

Q. You are innocent of that offense ? A. Yes, sir ; we are.

Q. You allow them to make it for you, and you don't make
it for tliem ? A. No, sir ; we do not.

Q. And the fast freight lines that go westward go laden with
freignt, quite innocent of any discriminations as to any shipper
west of Buffalo ? A. I don't know about west of Biift'alo ;
I can only tell you what we do with oar road.

Q. Well, you don't get vouchers from the Michigan Central,
or from any of your western connections, representing draw-
backs paid by them ? A. On westbound freight ?

Q. Yes, sir? A. No, sir.

Q. Why do you allow it on eastbound freight ? A. Because
we agree to.

Q. Is that the only reason you can give ? A. Yes, sir.

Q. And you doii't agree to on westbound freight ? A. We
can make any rate we please to Chicago, westbound, and they
are obliged to honor it the same as we do on their eastbound
freights, but we do not.

Q. Why don't you? A. Because we can get the business
without it ; we have a pool here in New York, as explained.

Q. The reason you don't is because of the pool ? A. Yes,
sir.

Q. Because you agree not to ? A. Yes, sir.

414

Q. Aud then, if you get a pool on eastbound freight, you
will also agree not to? A. I hope so.

Q. Then you think this system of discrimination is an abuse ?
A. I don't know.

Q. You don't know whether it is or not? A. No.
Q. Do you know what difference there is between the classi-
fication on ycjur through rates as compared with the classifica-
tion of your local rates ? A. There is some difference ; I don't
know just what it is.

Q. I have asked a series of questions of Mr. Eutter — did you
hear me ask him those— I don't want to repeat testimony too
much on the minutes — about the difference of their classifica-
tion ; upon what principle it rests ? A. I think I did ; I heard
some questions about that.

Q. What is your opinion about the principle of classification ?
A. About the same as Mr. Eutter expressed it.

Q. Suppose you give the Committee your idea, what the
princijile of classification is ? A. There are a great many
elements ; one is, the value of the property ; the style of the
properly ; whether it can be handled cheaper than other kinds
of property ; the bulk of the property ; whether we can load
cars to their full capacity with it or not.

Q. And the regularity of the traffic ? A. Yes, sir.
Q. Have you ever entered into any computation as to the
relative influences of each one of these elements upon the cost
of transportation ? A. No, sir.

Q. Have you ever entered into the computation as to the in-
fluence of grade upon transportation ? A. No, sir.

Q. Have you ever entered into any computation, or know
anything upon tlie subject of tlie influence of bulk of trafSc
upon transportation — the cost of it ? A. No, sir.

Q. Therefore, when you fix your rate, you fix it without the
slightest regard to its cost, practically ? A. Practically.

Q. Do you ever take into consideration the amount of the
capital stock and loan account of your road in fixing the cost
of transportation ? A. No, sir ; it would take too long to
make a special calculation of that.

Q. That is not your province? A. No, sir.
Q. Now, tell me, do you think, being the person having
charge of making the rates, that you have no public function

415

to perform in relation to making the rates at ail ? A. Well, I
don't know what j'ou mean by that.

Q. What I mean by it is this : is it yotir opinion that the
interest of the railway is the only interest you are bound to
regard? A. No, sir.

Q. What other interest is there to wliichyoupay attention?
A. The interest of the shippei-.

Q. The interest of the shipper and the interest of the rail-
way are the only two interests that you pay any attention to ?
A. I guess that is about all.

Q. The general public interest you don't think of? A. No;
not much.

Q. You say the eveners received from July 1st, 1875, to
September 30th, 1877, $15 a car ? A. I think they did.

Q. That is twenty-seven months ? A. I think they received
it until September, 1878.

Q. Suppose you confine yourself to twenty-seven months —
September, 1877 — do you know the figures, the number of the
live stock cars that came to the City of New York during that
period from the west ; will you get it for us? A. Yes, sir ; if I
can get it.

Q. Were they 98,500 ? A. I don't know.

Q. Do you think that is about the figure ? A. During
twenty-seven months ?

Q. During twenty-seven months ; this evening arrangement ?
A. What is the number you stated ?

Q. 98,500 ? A. I should not have stated it quite so much,
I guess.

Q. How much would you have stated it ? A. About 70,000
during those twenty- seven months.

Q. At $15 a car, how much money during those twenty -seven
months would have been divided - those 70,000 cars ? A. Do
you want to know how much that amounts to ?

Q. Yes, sir. A. Do you want me to figure it for you ?

Q. Yes, sir; 70,000 cars at $i5 a car? A. $1,050,000.

Q. During those twenty-seven months $1,050,000 were
divided between those four men ? A. I don't know about lour
men ; I never heard about four men.

Q. Between those three men ? A. Yes, if that was it.

416

By the Chairman :

Q. How long would it take to furnish this information ex-
actly? A. I think I can have it exactly for you when I
corae up to-morrow, if I am required to come at all to-morrow,
or I can send it up to you.

The Chairman — The examination will be better upon the
sworn fact than upon a hypothetical case.

Mr. Sterne— Well, we will have the sworn facts here; of
course I want to bring that ont in the testimony, that the
receipts of Mr. Morris, the evener from your road, were
$369,000 during that short period of time.

By Mr. Shipman :

Q. That is not all profit ; when they divide it ? A. When
they lose a $100 a car on some of their stdck in buying it,
tliey have to make us even to get the $15 ; now, do you want
anything from me on that ?

By Mr. Sterne :

Q. Yes, sir ; I want the amount Mr. Morris got out of your
road ; the money ; if you will put Mr. Morris on the stand I
will be much obliged to you? A. He could n&t tell you any
better than I can ; I have got one request from you to furnish
you the amount paid Mr. Morris during 1878; that is one
request you made of me.

Q. We want it from the start of this evening system, from
the beginning to the end of it, the amount paid to Mr. Morris ?
A. From what time ?

Q. From the time the evening system started ? A. Instead
of 1878, as yon asked me a couple of hours ago?

Q. Yes, sir ? A. From July 1st, 1875, until what time ?

Q. Until September 30th, 1878? A. All right, sir.

Q. And then from September 30tb, 1878, under the $10.00
arrangement until here recently — last May; it started Septem-
ber 30th, 1878? A. No ; I think the $10.00 started September
2d and ran to December 1st ; I have already testified to ;
now, you want it to September 30th, 1878 ?

Q. I want it during its existence ? A. All right.

Q. This lighterage contract that you spoke of, for what pe-

41.7

riod of time was that ? A. I don't know ; I don't know as there
is any contract.

Q. How did you come to give your freight to a lighterage
company, instead of doing it yourself? A. Because we have
not the facilities to do it all ourselves.

Q. Could not you get the facilities to do it all yourselves ? A.
I suppose so.

Q. You have not the facilities because you don't want to get
them ? A. I don't know why ; we made arrangements with
the lighterage company to do it, at what we figured it would
cost us to do it.

Q. Why don't you do all your business, then, by the lighter-
age system ? A. Because we do it by ourselves.

Q. If it is profitable for you to do it by yourselves, why don't
you do it all yourselves ; or, if not profitable to do it all by
yourselves, why don't you give it to the lighterage system ? A.
I don't know.

Q. You have a contract, haven't you, for the handling of
your freight at the Erie terminus ? A. No, sir.

Q. You do it all yourselves ? A.. Yes, sir.

Q. Can you tell us how much it costs for terminal handling?
A. No, sir.

Q. Have you never taken the trouble to inquire ? A. I used
to know what it cost, but I have not kept track of it of late
years.

Q. Do you know now ? A. No.

Q. Has not the cost of transportation decreased fifty per
cent, and with it a corresponding decrease in the cost of ter-
minal handling in the past ten years ? A. I don't know.

Q. Has there been any decrease at all, and if so, what ? A.
I don't know.

Q. You don't know whether there has been a decrease in
cost? A. I can only think that there has.

Q. You do the work ? A. I don't do the work, and don't
know ; my business is to make rates, and that is all I do for
the company.

Q. Haven't you under your charge the handling of freight —
of your goods ? A. No, sir.

Q. Tell us what proportion of your general whole trafi&c,
westward bound and eastward bound beyond Buffalo, comes
from the west or goes to the west by fast freight lines, as corn-
el

418

pared with that which you do in your own cars ? A. The
through freight ?

Q. Through freight? A. All that is done by fast freight
lines.

Q. None done by your railway corporation? A. There
might occasionally be a shipment, but a very rare one, except
live stock.

Q. Upon what basis ? A. Live stock, coal, oil, and milk ;
that is local.

Q. Will, the whole of your local traffic is in your own hands?
A. Yes, sir.

Q. Why liaven't you fast freight lines for your local traffic?
A. Don't want any.

Q. You want to keep that under your own control ? A. Yes,
sir.

Q. That is also the same reason as to the milk traffic ? A.
Yes, sir.

Q. And that is also the same reason as to your live stock
traffic ? A. Yes, sir.

Q. Tell us what the names of the officers are of those various
fast freight lines? A. Well, Great Western Despatch, H. E.
Duvall, General Manager ; Henry C. Vilas, Secretary and
Treasurer.

Q. Is he related to you ? A. He is supposed to be a
brother ; Erie and North Shore Despatch, J. W. Smith, General
Manager, Detroit; Wabnsh and Erie line, A. W. Colton,
Manager, Toledo, Ohio; Erie and Milwaukee Line, A. J. Cooper,
General Agent, Milwaukee ; that is all, I believe.

Q. These corporations have New York offices, haven't they?
A. The Great Western Despatch general office is in New
York.

Q- Who is the New York agent ; have you named him? A.
I have named the general manager, and the secretary and
treasurer.

Q. Are they in New York? A. 317 Broadway, New York.
Q. You have nothing to do with the passenger traffic of
your railway at all ? A. No, sir. .

Q. You don't know, therefore, under what arrangements
sleeping cars and drawing-room cars are run upon your road ?
A. No, sir.

Q. Who are the other officers that you have named — I mean

419

•what officers are there who are residents of New York as to
these other fast freight lines? A. No other officers ; each of
these lines has a contracting agent in New York.

Q. Have you a special rate on coal oh, have you given

those names ? A. Yes, sir ; I have not given the names of
the New York agents.

Q. I want those ? A. Do you want the contracting agents ?

Q. Yes, sir ; the contract agents in New York ? A. I don't
know whether I can give them all to you or not ; Great Western
Despatch, 'George H. Wheelock.

By the Chairman :

Q. Give us the number ? A. I am trying to think ; 305
Broadway, I think ; South Shore Line, T. S. Dumont ; I don't
know his number ; Erie and North Shore Despatch, C F.
Case, 401 Broadway ; Erie and Milwaukee Line, Geo. T.
Nutter, 401 Broadway ; Wabash and Erie Line, M. T. Dennis,
401 Broadway.

By Mr. Stekne :

Q. You have stated in your answer to me that in making
up your rates you took into consideration the interests of the
railway and the interest of the shipper ; do you also take into
consideration the interests of people other than the shipper
in the same locality? A. Only to the extent not to dis-
criminate against parties in the same business.

Q. Don't you ? A. Try not to.

Q. When you give a special rate to a man in the hardware
business, from Binghamton, don't you discriminate against
every hardware man in the town ? A. To Binghamton, do you
mean?

Q. Or from Binghamton, or anywhere ; from Binghamton to
Elmira ? A. No, sir.

Q. You don't think you do ? A. No, sir.

Q. You don't think your special rate has any influence upon
the business of the others ? A. No, sir.

By Mr. Shipman :

Q. Why ? A. Because the other shippers are smaller ship-
pers ; retail shippers ; they don't sell in Elmira ; they sell in
Binghamton. ,

420

By Mr. Steene :

Q. Do you enter into an inquiry in each special case, when
you give a special rate as to the business that is done by every-
body else in the town ? A. I have a general knowledge of the
business done by every one on the line of our road.

Q. You depend upon your general knowledge ; you don't
enter into a special inquiry in each case? A. If I don't feel
myself sufficiently conversant with the business of that town
and locality in a special case, I do inquire into it, before giving
a special rate.

Q. How do you inquire into it — do you take testimony ? A.
I have a man in my employ who does nothing but keep me
posted in such matters, traveling up and down the road all the
time.

Q. Then that man determines for you whether a special
rate is just or unjust, in a given case ? A. No, he does not.

By Mr. Shipman .

Q. Furnishes you with the facts ? A. Yes, sir ; and I de-
termine.

By Mr. Sterne :

Q. Let us find out about that ; you have got a special man
traveling all over the line of your road ; how often does he
make reports to you, and will you bring these reports before
the Committee ? A. They are verbal reports.

Q. And you keep them in your head, as to the whole busi-
ness along the line of your road? A. Yes, sir.

Q. And in a given case where application is made to you
for a special rate, you remember that verbal report, and de-
termine upon that report ? A. Determine upon knowledge I
have.

Q. How often does that man report to you? A. Once a
week.

Q. Is it one man, or more than one man ? A. One particu-
lar man.

Q. What man is that? A. Mr. Winans.

Q. Is he accessible to a subpoena? A. He is not here
much of the time ; be comes in Saturdays and stays i. day or
two, and I start him out again.

421

Q. You start him out mainly to gather this information as
to whom to give special rates to, and who not? A. No, sir.

Q. What is his special business? A. To keep me generally
informed.

Q. On what? A. On everything he sees, or can find out.

Q. Does he keep you informed as to the enemies of your
road, too, and what they ship on other people's roads? A.
Yes, sir.

Q. Keeps you informed as to who ship by canal and who
don't ? A. Not very much.

Q. Not much about that ? A. No.

Q. You tell him not to keep you informed about that ? A.
No, sir.

Q,. Do you or don't you ? A. I don't send him to the canal
district very much.

Q. Have you another man for the canal district? A. I have
a man in Rochester, who keeps me more particularly posted
about that.

Q. Then you have got two men, one who informs you who
uses the canal and who don't, and another man who informs
you who uses opposition lines in New York? A. I have got
this one special man as a traveling man, and we have agents
at all our stations.

Q. What does he inform you about ? A. About everything
he finds out.

Q. What is he instructed to find out ? A. Everything he
can.

Q. If he finds out some old lady took an omelet for break-
fast, or a mutton chop, he don't inform you of that? A. I
don't believe he would.

Q. Therefore you must give him some definite instructions
as to what information he is to get ? A. I instruct him to find
out everything relating to the business of our road.

Q. Is he to find out also whether people steal goods from
the road ? A. No, sir.

Q. He does not do any detective service for your road as to
other employees ? A. No, sir ; I have got one who does,
though, if you want to see him ; he is a good one, too.

Q. Oh, no ; I want to know what business this man is depu-
ted to do? A. Just as a man would be deputed by you to look
after your business.

422

Q. I have a good many men looking after my business ; but
I employ tliem so as not to interfere with each other ; I assume
you, as a business man, do the same ; now tell us what you tell
this particular man, whose name you have given, to do ? A. I
have answered it already.

Q. I don't think you have ? A. I cannot answer it any fur-
ther unless you ask me specially.

Q. You tell him generally to look out for the interests of
your company ? A. Yes, sir.

Q. In what directions ? A. So far as the freight business is
concerned I said.

Q. You confined him to the freight business ? A. Yes, sir.

Q. What has he to do in connection with the freight busi-
ness? A. He visits the different stations, and ascertains how
matters are going on ; whether parties are satisfied with the
rates they have, and so on.

Q. And does he visit stations on other railways to find out
what they ship on other railroads? A. No, sir; except those
stations are common to both.

Q. Does he find out what shipments are made on other
roads ? A. No, sir.

Q. That you don't care anything about ? A. Incidentallj^
he might.

Q. He does not report to you about that ? A. He does, if
he finds out anything.

Q. What else does he find out ; does he find out the amount
of business done by each man ? A. No, sir.

Q. He don't find that out? A. I can tell that; the agents
at the stations can tell me that if I want to know.

Q. Does he find out the credit of a man ? A. No, sir.

Q. Pray tell what he does do? A. He finds out everything
he can find out.

Q. That is all you can tell us ? A. Yes, sir.

Q. And upon the basis of that information — his finding out
anything he can find out — you fix your special rates? A.
That governs me or aids me in making them.

Q. Do you know what it costs to haul a car from Buffalo to
New York ? A. No, sir.

Q. Do you know what it costs you to haul an empty car
back from New York to Buffalo? A. No, sir.

Q. Do you know how many cars go empty back to Buffalo

423

as compared to those that come from Buffalo to New York?
'A. No, sir.

Q. Have you any idea of the percentage of empty cars that
run westward compared with the percentage of empty cars
that run eastward ? A. No, sir.

Q. You hare never taken the trouble to inquire whether it
would not be better for you to lower your schedule rate
from New York on westward bound traffic for the purpose of
filling your cars running westward? A. I have considered
that ; yes, sir ; a great many times.

Q. In considering that, didn't you take into consideration
ihe number of • cars you ran empty westward? A. No, sir;
not the number.

Q. The proportion as compared to full cars ? A. No, sir.

Q. Then you do not know whether you had any westward
bound cars running empty at all ? A. Oli, yes ; I know gen-
erall}' whether we have any going, but I don't know and do
not keep a record of how many or of the proportion that go
west empty.

Q. You don't know whether the proportion is larger or
smaller as compared with the number that run eastward
empty? A. I should say more go west empty than come east
empty.

Q. How many more? A. I don't know.

Q. You have no means ot guessing? A. We start a good
many cars west empty, but before they reach the west<^rn ter-
mini most of them are filled.

Q. Can you give the Committee the information that I
asked Mr. Eutter to give as to the proportion of your local
traffic to your through traffic ? A. No, sir.

Q. Do you know what proportion in the way of income the
local trafiSc bears to your through traffic ? A. No, sir.

Q. Do you know what proportion of your cars are used in
your local traffic as compared with your through traffic ? A.
No, sir.

Q. Do you know what proportion there is at all between
local and through traffic and wiiat proportion that pays into
the company's coffers ? A. No, sir ; I have got a general idea
of the tonnage east and westbound.

Q. Through or local, or both through and local? A. Both
through and local.

424

Q. Can you get from the books the information that I now
ask you? A. I have no books in my office or my department
at all that will show it.

Q. Have you no books in your department as to the amount
of tonnage that goes over your road as to the different classes ?
A. No, sir.

Q. None? A. No, sir.

Q. In whose department of your railroad would those books
be ? A. In the Auditor's office.

Q. You mean by the Auditor Mr. Little ? A. Yes, sir.

Q. Have you any books in your department, which will state
how much through traffic you do ? A. No, feir ; I keep no
books at all, as I have told you.

Q. Or how much local traffic ? A. Nothing of the kind.

Q. You do nothing but fix rates ? A. Perhaps a little more
than fix rates.

Q. What else do you do ? A. Out rates sometimes.

Q. Other than cutting rates and fixing rates you don't do
anything eke ? A. Yes ; I do a great deal of writing.

Q. I mean as a part of the functions of your office ? A.
No, sir ; that is my business — to attend to the freight rates.

Q. Will you furnish the iuformation as to the tonnage and
earumgs ; as to the local traffic as compared with the through
traffic, the amount paid for the local traffic as compared with
the through traffic and the amount paid by the whole — and in
local T include Buffalo, which you do not on your books ? A.
I don't know vvhether I cau give you this or not, it will depend
upon the Auditor ; I have to ask liim for this ; if he cau give
it, all right ; I keep no records of anything of the kind.

Q. Do you represent your railway in the pooling arrange-
ments— the west, ard bound pool? A. No, sir ; that is under
the charge of what is called the Trunk Line Executive
Committee ; Mr. Blanchard is the representative of our
company.

Q. Do you furnish any data or information upon which the
division of earnings is made ; the division of tonnage or freight ?
A. To the Commissioner do you mean ?

Q. Yes. A. It is done under my orders.

Q. When these arrangements were entered into between the
various trunk lines known as pooling arrangements you were re-
quested to furnish the information as to what proportion the

425

Erie Railway was entitled to, were you not under such an ar-
rangement? A. No, sir.

Q. What information were you requested to iurnish as a
guide to the Commissioner, Mr. Fink ? A. I did not give him
any ; we agreed upon the percentages before we apjjoin^ed the
Commissioner.'

Q. Did you represent your railway upon the agreement of
those percentages, or were you present at any conference ? A.
I think I was present.

Q. You were present at the conference where the percent-
ages were agreed upon ? A. I think so ; yes, sir.

Q. Upon W'hat basis were those percentages agreed upon ?
A. There was no basis to it really.

Q. What percentage did you get? A. What we got at tliat
time?

Q. Yes. A. Thirty- three per cent.

Q. What percentage do you get now ? A. About thirty-one
I think I said yesterday.

Q. Thirty -three per cent of the whole ? A. From New
York ?

Q. From New York ; divided between four lines of which
the New York Central gets thirty-five, and you get thirty-
three ? A. We only get thirty-one now.

Q. But you did get thirty-three ? A. Yes, sir.
Q. The New York Central got thirty-five ? A. No, sir.
Q. Thirty-three also ? A. Yes, sir.

Q. Upon what basis was tliat computation made by which
you consented to thirty-three per cent, or the New York Cen-
tral consented to thirty-three per cent ? A. We simply found
it was impossible to arrive at any understanding or basis
because of the non-existence of any statistics which would be
considered reliable as to the busines's of the past ; and, rather
than go to work to get up such statistics, if it was possible
to do it, we simply said to ourselves, there are three trunk
lines leading out of New York ; we will divide up this busi-
ness into thirds, and we waived the odd fraction, and gave thirty-
four per cent to the Pennsylvania, which was to include the
proportion given to the Baltimore & Ohio Road ; that was
about the only basis used.

Q. How did you come to consent to less ? A. I did not.
Q. How was it forced upon you ; by proving that you did
42

426

Dot do as much business as the other ? A. No, sir ; the Presi-
dent agreed to accept 81 per cent.

Q. Mr. Jewutt ? A. Yes, sir.

Q. Did you furnish any data upon which- he acted in agree-
ing to 31 per cent? A. The only data that was furnished was
the business subsequent to the formation of the pool that was
furnished to Mr. Fink daily.

Q. Then Mr. Pink has in his possession since the arrange-
ment that was made between the various trunk lines, the
through freight traffic, has not he? A. Yes, sir; from New
York westward, showing the number of tons carried uy each
road out of New York, daily.

Q. And lias he also the traffic showing die number of tons
carried by other lines from Baltimore and Philadelphia? A.
Only since a recent date.

Q. And also from Boston ? A. Yes, sir.

Q. Have you any arrangement similar to the one that exists
with the New York Central Railroad with the Grand Trunk
Railway? A. No, sir.

Q. Do you compete with the G) and Trunk Railway from
Boston ? A. Yes, sir.

Q. Do you have a Boston connection? A. Yes.

Q. What is your Boston connection? A. We lun out of
Boston by two different ways ; we run out by the Metropolitan
Steamship Company to New York, and also by the New York
and New England Road to Norwich, then by boat to New
York.

Q. You carry freight from Boston at the same rate west-
ward as you do from New York ? A. Yes, sir,

Q. You break bulk twice ? A. Some of it.

Q. On all that which you do over the Norwich Line you
break bulk twice ? A. Yes, sir.

Q. And you charge from Boston, breaking bulk twice, to
Chicago, St. Louis, Cincinnati and Kansas City the same
rates that are charged from New York? A. Yes, sir; the tariff
rates from Boston are tiie same as New York on all lines.

Q. What difference is there in mileage between St. Lonis' and
Boston, and St. Louis and New York, by your road, taking the
Norwich Line 2 A. I would have to have a railroad guide to
tell.

(Railway guide is handed to the witness.)

427

Q. By the Norwich Line ? A. I don't know how far it is.

Q. And the difference from here to Boston by the Norwich
Line, you have got it there? A. Do you want tlie distance by
Buffalo ? we can get to St. Louis in a great many different
ways.

Q. No, no ; I want the difference in miles from Boston by
your line to St. Louis, compared with New York to St. Louis
by your line ? A. This does not give it ; about 230 miles, I
think, by the Norwich Line.

Q. In addition ? A. Yes, sir.

Q. Now, by the other line, what difference does it make on
the other line ? A. You mean between Boston and New
York?

Q. Yes. A. I don't know ; that is a water line outside of
Martha's Vineyard; I don't know how far it is.

Q. That puts the Boston merchant on a par with the New
York merchant as to all shipments by your line to all western
points? A. Yes, sir.

Q. And you break bulk once with the steamship line that
you have mentioned ; what is the name of it? A. The Met-
ropolitan Steamship Company.

Q. Is that the Whitney Line ? A. Yes, sir.

Q. How does it come that you consent to placing Boston
upon an equality with New York although Boston is 2.30 miles
by rail further from western ]3oints than New York, and yet
discriminating against New York in favor of Philadelphia and
Baltimore under the pooling arrangement to the extent of six
cents a hundred on first-class freight, two and a half cents a
hundred on fourth class, and intermediate percentages on later-
mediate classes ? A. We have nothing to say about rates
from Boston ; we make the same rates that are made by the
Boston & Albany Road.

Q. What do you mean by you have not anything to say ;
could you refuse to carry from Boston ? A. Yes, sir ; we
could.

Q. What do you mean by saying you haven't anything to
say about it ? A. We haven't anything to say about form-
ing the rates.

Q. Why haven't you anything to say? A. Because we
make the same rates the Boston & Albany Road does.

428

Q. You mean the New York Central practically? A. I
mean the Boston & Albany Koad.

Q. Is not the Boston & Albany in connection with the New
York Central? A. Yes, sir.

Q. That is the road that is the close connection of the New
York Central with Boston ? A. That is one of their connec-
tions.

Q. Therefore, you follow the New York Central's guide on
the rate from Boston ; is that it ? A. No, sir ; we follow the
Boston & Albany, as I stated.

Q. Have you any agreement with the Boston & Albany road
by which you agree to accept whatever their rate may be as
the rate at which you will carry ? A. We have an agj-eement
by which we agree to maintain rates that have been agreed
upon.

Q. With whom is that agreement made — with the Boston &
Albany road or the New York Central ? A. The Boston &
Albany.

Q. That is a Massachusetts corporation? A. I don't know.

Q. You have made an agreement with the Boston & Albany
road by which you agree to charge the same rate that they do?
A. We have a verbal understanding of that kind.

Q. Have you also a verbal understanding with the Grand
Trunk llailway from that point? A. No, sir ; I believe not.

Q. How long have the rates to Boston been the same as the
rates to New York ? A. From Boston, do you mean ?

Q. Yes; from Boston ? A. Long before I went with the Erie
road, I think.

Q. Always been so, you think? A. I don't remember when
iLe tariff rates were arranged upon any other basis.

Q. Does it pay your company to haul goods from Boston to
Chicago at the same rate as from New York to Chicago ? A.
I don't believe it pays us as much.

Q. Do you think it pays at all ? A. That I don't know.

Q. You make rates without the slightest regard to cost ? A.
Practically.

Q. Do you know of any other business except railroading of
which that is true ? A. I don't know.

Q. You are a man of some experience ; have you ever heard
of any business except that of railroading in which the rates are
fixed — the charges — for the community without the slightest

429

regard to cost? A. I don't know what you mean by the rates
fixed ; I have heard of business being done at a loss.

Q. Do you know any other business except that of raihoad-
ing in which the people who fix the charges fix tliem without
the slightest regard to the cost of them ? A. I don't know.

Q. You do a through traffic from San Francisco, don't you ?
A. We transport business over our road which comes from San
Francisco.

Q. What rate do jrou get on that business, from New York to
Buffalo ? A. We get a certain percentage of the through rate,
whatever it is.

Q. The through rate is fixed at San Francisco ? A. Yes, sir.

Q. And it varies with that ? A. Yes, sir.

Q. And whatever special rates are given to San Francisco
you pro rate with them ? A. Yes, sir, by taking this agreed
percentage.

Q. Oh, do you know something of this Grand Tiunk Rail-
way ? A. In what respect ?

Q. Its rates ; are they the same as yours to the west from
Boston? A. I think they are a little less.

Q. Although a good deal further away? A. Still I don't
know positively ; there is some agreement there by which the
business is divided, I think, between the Grand Trunk and
the Boston & Albany, and I think that

Q. (Interiupting) It is not divided with you? A. No, sir.

Q. You simply follow the tail of the Boston & Albany ?
A. Yes, sir, that is about it ; we make the same rates
they do.

Q. Have you any unit of freight charges on your railway per
carload or train load ? A. I don't get the idea exactly.

Q. A unit of charges ; so much a car load, so much a train
load ? A. No, sir.

Q. Not on anything? A. We make car-load rates some
times ; a special rate for some special shipment.

Q. Those are not general rates on that point ? No, sir.

J. H. Rutter s examination resumed :

By Mr. Sterne :

Q. Mr. Eutter, what papers have you brought with you ? A.
Two contracts between the New York Central & Hudson
Biiver Eailroad Company, and the Standard Oil Company.

430

Q. Are those originals or copies ? A. Those are originals ; I
sha'l have to ask to take 'them back to tlie office to have a
copy ma;1e.

Q. Are those existing contracts? A. Yes, sir.

By Mr. Baker :

Q. Oaeis an original and one is a supplemental? A. Sup-
plemental to the first agreement.

Two papers produced, mari?ed respectively for identification,
" N. Y. C. Ex. G and 7, June 18, 1879."

Q. What else have you brought? A. The agreement to lease
elevators A and B, Sixtieth street, North river, between the
New York Central & Hudson Eiver Eailroad Company and
H. McK. Twombly^

Lease marked for identification "N. Y. C. Ex. 8, June 18,
1879."

Q. (By the Chairman.) Is this the original ? A. That is
the original which I would like to take and return in its place
a copy.

Q. (By Mr. Baker.) You will have copies of these pre-
pared? A. Yes, sir.

Q. What else ? A. Copy of agreement between New York
Central & Hudson Hiver Railroad, and the American Mer-
chants Union Express Company.

Q. Is that the agreement now in operation ? A. Yes, sir.

Q. That is a copy? A. It is a copy of the amendment to
the American Express Company's contract.

Q. Tliose two papers you will leave with the Committee ? A.
Those I can leave with the Committee.

Q. Do you know that they are copies? A. These are copies
of a copy.

Q. You know them to be copies? A. Well, they were made
by a clerk in my ofiice.

Q. Do you know the original ? A. I was about to say that
the original was mislaid some months ago and cannot be lound.

Q. Do you know the copy which answers the purpose of the
original in your office ? A. I believe this is a copy.

Q. Do you know the contents of the copy which you have in
your office ? A. I have no copy in my office.

431

Q. Then you have no means of knowing whether that is a
copy or not ? A. Only as my clerk hands it to me as a copy ;
I thiuk it can be verified if yon desire it.
. Mr. Sterne — We will accept it as a copy.

Q. (By Mr. Depew.) He copied it under your directions,
didn't he? A. Yes, sir.

Q. (By Mr. Bakeb.) You believe it to be a copy of the origi-
nal which has disappeared ? A. Yes, sir.

Q. Have you cast \'our eyes over it so as to be able to verify
it? A. I have not; it lias been handed to me since I have
been in the room.

Q. Will you look at it so as to see if you can tell whether it
is a copy ? A. (After looking at it.) I believe it is a copy, and
this is also a copy.

Copy of agreement between N. Y. C. & H. E. R. Co. and
A. M. U. Ex. Co., marked for identification " N. Y. C. Ex. No.

9, June 18, 1879." Copy of amendments to American Express
Company's contract marked for identification " N. Y. C. Ex.

10, June 18, 1879."

Q. What other papers have you brought ? A. I have a copy
of the agreement between the New York Central and other
companies forming the White Line, anf' a copy of a similar
agreement forming the Blue Line.

Q. (By the Chaieman.) Those are copies of the originals that
you did have ? A. I didnot have the originals ; they are copies
of copies which I brought here before.

The papers are marked respectively for identification " N.
Y. C, Exhibits 11, (Blue Line,) and l'/, (White Line,) June 18,
1879."

Q. Have you brought any other agreements? A. Nothing
else ; those are all I was directed to bring that I can bring.

Q. You were askrd also to bring information for this Com-
mittee as to how many cnrsthe Merchants Despatch Transpor-
tation Co. had upon your line ; how many new cars they fur-
nished from year to year ; have you that information? A. As
those are two questions, I will answer them separately ; the
•Merchants Despatch liave 3,451 cars which run over our road.

Q. That is one question, now as to the other ? A. The next

432

question on this paper is " How much have you paid the Mer-
chants Despatch Transportation Co. for the year 1878 as earn-
ings on one of their cars per month '" We will try and obtain
this information, but it is very diflScult for us to do it, and per-
haps we maj- not be able to do it.

Q. Can yon give the amount that has been paid the Mer-
chants Despatch Transportation Co. upon all their cars? A.
Will you allow me to read the other questions and answer
them as I go along, and perhaps it will facilitate your business
as well as my own ; it will make it much easier for me to an-
swer it.

Q. Tery well. A. The next question says, " How many cars
have they on your road?" I answered that by saying 3,451 ;
" How much have you paid for the use of the cars, and how
much have you paid for percentages and commissions ?" Per-
centages and commissions, as I understand it, are the same
thing, and we will give you that information as soon as it can
be obtained ; it will take considerable clerical labor.

Q. Have you the information as to the use of the cars ;
the amount paid by the New York Central Railway ? A. I
have answered that by saying that il will be obtained and
given to you.

Q. As to the whole of that ? A. Yes, ?ir ; these questions
have been taken down in one of our offices by a stenographer
and the information will be obtained, if possible, from our
books : " Has the Merchants Despatch Transportation Com-
pany since 1876, furnished to you any new cars to take the
place of cars that were worn out ? "

Q. Since 1874? A. It says 1876 here.

Q. No, it says 1874. A. I beg your pardon, it does say
1876.

Q. Kindly alter that to 1874, so as to avoid the necessity of
putting any new question? A. "Give what the Merchants
Despatch have received from the New York Central & Hud-
son River Railroad Company, for the past two years;" that
we will endeavor to give you ; " Who knows whether the Union
Stock Yard and Market Company is leased? " it is leased by
the road, and the road owns part of the structures, and the
laud was purchased by the New York Central & Hudson
River Railroad Company.

Q. That is the answer ; leased to whom ? A. It was leased

433

to the Union Stock Yard and Market Company ; " Who are
the officers of the Union Stock Yai-d and Market Com-
pany?" J. B. Butcher, President, A. W. Palmer, Treasurer,
A. T. Thomas, Secretary ; " How much did the elevator
referred to in your testimony cost, that is leased by the
New York Central & Hudson Eiver Raih'oad Company,
and how much is the rent ? " there are two elevators, and
the information as to the cost will be furnished as soon
as possible.

Q. Please include iu that information the cost of the land?
A. " Will you give us the total amount of your freight traffic
on the New York Central & Hudson Eiver Eailroad, from
and beyond all the western termini of the road to and beyond
New York, and to points east of Albany and Troy ; tonnage
and earnings ? " it will be obtained if possible.

Q. Can you give the Committee any information as to the
period of time in which you expect to obtain it ? A. The
question does not refer to any time ; I should, if possible,
obtain it for a year without any further direction.

By the Chairman :

Q. No ; the time within which you could get the information
for the Committee? A. I could not give you the slightest in-
formation on that point ; I think it will involve the entire ex-
amination of all our accounts, bills and everything ; our
accounts have not been kept with reference to giving this
information.

Q. Do you think you can give it within a fortnight ? A. I
don't believe we can.

Q. Could you give it within a month ? A. I would not give
you an opinion ; I cannot tell ; if it is possible to obtain it from
the books, we will give it ; if we find, upon trial, that we can-
not give it, we will say so, and give you the best we can.

Q. (By Mr. Bakee.) Such information as the books already
show upon the subject? A. Yes, sir ; are you ready for me
to go on ?

Q. Yes. A. "Will you give us the total amount of your
freight traffic on the New York Central & Hudson E. E. E.,
from New York, and east thereof, and from Albany and Troy,
to and beyond the western termini of the road ; give us the
total freight traffic of the road ; give the total freight tonnage
43

434

and earnings from all local stations, to and beyond all western
terminal stations ; from all western terminal stations to all
others ; from all local stations to New York and east thereof ;
from New York to all local stations in the State ; from local
stations to local stations, including all other than the fore-
going." It will be obtained if possible. " What proportion of
the through ] )assenger traffic is done on the drawing-room and
sleeping cars, and what proportion upon your ordinary cars ?"
It will be obtained, if possible.

Q. In that connection, let me ask you one question. Don't
the drawing-room car company make returns to you of its
passen:er traffic from point to point, and pay you a percentage
upon it? A. Tbey make no returns to me.

Q. And yet you are the Passenger Traffic Manager ? A. Yes.

Q. And they make no returns to your office? A. They do
not.

Q. Under the terms of the contract with them, they are not
required to? A. I have never seen the contract.

Q. Is there any ? A. I don't know whether there is or not.

By Mr. Baker :

Q. Do they make returns to any one on your road ? A. I
don't know.

Q. You never inquired by virtue of what right drawing-room
and sleeping cars run on the line of your road? A. I don't
remember that I have made particular inquiries.

Q. And you now do not know ? A. I do not know.

Q. By what right Mr. Wagner or anybody else puts drawing-
room cars or sleeping oars on your road, and despatches them
with your train, with your locomotives and cars, you don't
know ? A. No, I do not.

By the Chairman :

Q. The passenger car conductors always take up drawing-
room car tickets or collect them on the train, do they not, and
report them with the other tickets ? A. I cannot answer defi-
nitely at all what the}' do.

Mr. Sterne— That is a matter of detail that the Traffic
Manager has nothing to do with — does not occupy himself
with.

435

By Mr. Shipman :

Q. The drawing-room car company pay so much for hauling
their cars ? A. I don't know that.

By Mr. Sterne :

Q. Go on, Mr. Kutter. A. " What is the extent of your
local traffic, as compared with your through traffic ? Divide
this up as you are requested to divide up your freight traffic
— that is, considering Albany and Buffalo as local points,
instead of through points ; produce the contract of the
Standard Oil Company." I have produced the contract
of the Standard Oil Company, and in regard to the other
questions about the passenger traffic, we will endeavor to ob-
tain it.

Q. Can you give the Committee aay information as to the
time it will require to obtain it ? A. I cannot ; I think it will
take a great deal of time.

Q. Beyond the next legislative session, do you think ? A. I
could not tell you that ; I simply say that there is every dispo-
sition on the part of the company to furnish all this informa-
tion, and we will furnish it just as soon as we can, and we will
endeavor to give it to you before the next let,islative session.

By the Chairman :

Q. There is one thing further ; I don't know whether you
were asked to produce it, and that is, whether you could not,
from your books, in some way, give us the amount of goods
shipped here by the leading firms of Mew York, so as to give
an absolute comparison instead of a hy|)otl)etical comparison?
A. Do you mean to give the quantities of goods forwarded by
shippers ?

Q. The amount of goods shipped, for instance, by A. T. Stew-
art &, Co.; the amountof freight sent from your depot from that
concern ? A. Our books are not kept with reference to giving
that information.

The Chairman — I did not know but your local station agent
would know ; there was evidence adduced here the other day
to show that certain business done in the city here was, at
least, equal to or larger than that of Leggett & Co. ; that
standard of comparison, of course, is objectionable, if we can
get the exact amount.

436

Mr. DepeW— I don't think we keep an account with each
specific shipper.

The Witness— I know we do not; if we undertook to get
that it would be from an immense mass of slips of paper.

By Mr. Steene :

■Q. Mr. Goodman would not know the amount of the ship-
ment made by any particular house ? A. I don't know ; he
may have taken some means to find it out ; give me a memo-
random of what you want furnished.

Mr. Sterne — That would not be of much use unless you
furnish it within some period of time about which we need to
give ourselves any concern.

Adjourned to Thursday, June 19th, 1879, at 10 o'clock A. M.

New York, June 19, 1879, 10 a. m.

The Committee met pursuant to adjournment, and was called
to order by the Chairman.

Present : All the members of the Committee except Mr.
Grady.

Mr. Stebne —Before proceeding with the examination of Mr.
Butter, I would like to put in evidence the agreement of con-
solidation of the various railways which now form the New
York Central Division of the New York Central & Hudson
River Bailroad.

(Book containing agreements referred to received in evidence
and marked " N. Y. C, Exhibit 1, June 19, 1879 ;" particularly
articles 14 and 16.)

Also the agreement of consolidation between the BuSbIo &
Niagara Falls Railroad and the Lewiston Railroad Company,
and the New York Central. No, it is not a proper character-
ization of that agreement to say that it is a consolidation. It
is an agreement in which these two railways were leased to the
New York Central Company, and subsequently, under the act
which was passed allowing the consolidation of leased lines,

437

consolidated by tlie purchase of the stock of the various rail-
way companies by the New York Central.

(Book containing agreements referred to received in evi-
dence and marked "N. Y. C, Exhibit 2, June 19, 1879;" par-
ticularly section 15.)

Jamen H. Butter, examination resumed :

By Mr. Sterne :

Q. Have you brought any of the information that you
were requested to bring for this morning? A.. I have not.

Q. Wbat would have been the rate to carry five hundred
car loads of grain from Buffalo at the time when Dows & Co.
had their rate at twelve and a half cents from the west .'' A.
About five cents a bushel, I should say, without being exact.

Q. You mean that was your proportion, when you speak of
five cents a bushel ? A. I thought you were asking me about
the shipment from Buffalo.

Q. When you give a special rate to a man, does that schedule
rate go down to the special rate? A. I don't understand the
drift of your question.

Q. David Dows & Co. had a special rate at twelve and a
half cents on a particular shipment from the west, five hun-
dred ear loads of grain; now your proportion of that I under-
stood you to testify, was — A. About eight and three quarter
cents.

Q. Per hundred ? A. Yes, sir.

Q. Did you, at that time, ship grain from Buffalo at eight
and three-qufirter cents a hundred ? A. I think we did.

Q. Schedule? A. That was about our open rate; we had
no published schedule.

Q. Did you along the line ? A. I can't tell you positively ;
our rule would be to do it.

Q. From all local points ? A. From any point where there
was similiir property to be shipped.

Q. You mean in like quantity? A. No, not in like quan-
tity; similar property.

Q. Didn't I understand you to testify that the rate was made
to Dows & Co. in consequence of the very large quantity that
they shipped? A. I would not consider five hundred cars
was a very large quantity.

438

Q. Has the capital stock of the Merchants Despatch Trans-
portation Company been increased lately ? A. I know noth-
ing about the Merchants Despatch affairs.

Q. Can you tell how much per ton is paid by your corpora-
tion to the Albany Bridge Company for freight that goes over
your road, eastward and westward bound ? A. No.

Q. Don't you know ? A. Not positively.

Q Is anything paid to the Albany Bridge Company? A.
I don't think there is ; it is a matter of account.

Q. Pray tell us what you mean by that? A. I mean that
the Albany Bridge Company is the New York Central &
Hudson Biver Railroad Company, and the Boston & Albany
Eaih-oad Company, and they keep accounts with the Bridge
Company in order to settle foi the use of the bridge between
the two roads.

Q. In these accounts is there not a specified sum per ton, or
per hundred for the use of the 'bridge? A. I don't know
whether there is or not ; I think there is.

Q. Can you let us know what the amount is ? ' A. I will it I
can ; I think I can inform you in a general way as to that
bridge matter, without stating whether it is fifty cents or a
dollar a ton ; there is a charge made, or was the last I knew
anything about it, for all the freight that goes over the bridge,
and after the expense of running the bridge, keeping it in re-
pair and other work that it does, are deducted, that amount is
credited back to the railroads, and I believe that portion of it
goes back into our freight earnings account; that was the
manner in which is was kept the last time I inquired into it.

Q. The improvements that have been made at Albany in
recent years, their depot arrangements, &c., don't they belong
to the Bridge Company ? A. I think not ; I am not positive
about it.

Q. Has not the Bridge Company a fund of its own ? A. I
think not.

Q. Hasn't it officers of its own ? A. I think it has ; yes,
sir.

Q. Hasn't it a treasurer ? A. I am not sure.

Q. Are you quite certain that the New York Central owns
the greater part of the stock of that bridge ? A. I am as cer-
tain of it as I am of a great many things without actual, posi-
tive knowledge.

439

Q. And that the Boston and Albany owns all that part of the
stock that the New York Central does not own ? A. Yes, sir.

Q. That is the idea? A. Yes, sir.

Q. That there is no stock in the hands of individuals at all?
A. Yes ; I am very positive that is the case.

Q. And these officers are officers [designated by these two
dorporations ? .V. Yes, sir.

Q. Is there not a specified amount charged for passenger
traffic over that biidge ? A. I really do not know about that.

Q. You are the Traffic Manager, as to passengers as well as
freight ; don't you kuow whether there is not a specified
amount charged ? A. I have just told you that I do not.

Q. Who would be likely to know? A. I think Mr. Depew
can tell you as well as anybody ; our accountant, of course,
would know, or treasurer.

Q. You don't know whether ten cents of the 13.10 is the fare
charged for the bridge ? A. I do not.

Mr. Depew — It is.

The Witness— Then I will say it is.

Q. That does not go back to the passengers, does it? A.
Yes, sir.

Mr. Depew — It goes back to the passenger earnings.

The Witness- It would go back to passenger earnings ; that
is what I mean.

Q. It does not go back to the individual passengers? A. I
should say not.

Q. Has Franklin Edson a special rate with you ? A. Not
that I know of.

Q. Do you know anything about the Buffalo elevator ? A.
A little ; yes.

Q. Does that belong to the New York Central Railroad
Company ? A. Yes, sir.

Q. Has it .been leased to anybody? A. Yes.

Q. To whom has it been leased ? A. Whitney & Twombly.

Q. Recently? A. Yes.

Q. Do you know anything about how much that elevator
cost ? A. I do not.

Q. Have you a copy of that lease ? A. I am not positive
whether I have or not.

Q. Who does your lighterage ? A. John H. Starin lighters
everything but grain.

440

Q. Tou do not do any lighterage of your own ? A. No.

Q. Since when has John H. Staiin had a contract to do the
lighterage for your company ? A. He has done it ever since
I was connected with tlie road.

Q. Have you a contract with John H. Starin ? A. I think
we have not.

Q. Do you permit him to charge as he pleases for lighter-
age ? A. We pay him for the lighterage.

Q. Without any understanding with him ? A. Oh, yes ; we
have an understanding witli him.

Q. Is that verbal ? A. Yes ; at least, I am not aware of any
contract being in existence ; I believe it is verbal.

Q. Do you know what the contract is ? A. Do you mean
what the prices aie ?

Q. Yes ? A. We pay him sixty cents a ton.

Q. On all that he does ? A. There are two or three items
that are separate chaiges, but I don't remember exactly what
they are ; substantially they are sixty cents a ton, however.

Q. Wliat propoi tion of the total freight of the New Yoi-k
Central Railroad handled at this port does he do ? A. 1 don't
believe I could tell j'ou that now.

Q. Could you find out ? A. I think I could.

Q. Have you no approximate idea of how many tons he
moves during the course of a year or nionth ? A. No, I could
not undertake to remember it ; it is on the record ; or it
should be, and can be told.

By the Chairman :

Q. He handles it all, you say, except grain ? A. Oh, no,
not all ; all that is lightered he handles except the grain.

Mr. Shipman — He is answering as to what is delivered
here ; a great deal of it is not lightered at all.

By Mr. Sterne :

Q. What proportion of your trafiEic is lightered? A. I could
not undertake to tell you ttat ; I never had occasion to know,
and never looked to see.

Q. You have seen this voucher that was produced here,
haven't you, during Mr. Vila's examination ? A. I saw a paper
in your hands yesterday.

441

Q. Did you look at it ? A. I did not look at it.
Q. Do you know who the officers of the Wagnoi- Drawing-
room Car Company are ? A, Only Wagner.

Q. Has that company anv office in the City of New York ?
A, Yes.

Q. Where is that ? A. They have an office in the Grand
Central depot ; I suppose tliat answers your question ; they
have some ticket offices about.

Q. I am now speaking of the office where there is some offi-
cer who may be able to tell us the arrangement between that
company and the New York Central it Hudson River Eail-
road? A. I should say that if that information could be ob-
tained from them at all, it could be obtained from somebody
whose office is in the Grand Central depot.

Mr. Depew— That arrangement is subject to a contract,
which we will produce.

Mr. Steune — Well, if you are willing to produce the con-
tract ?

The Witness — Certainlj' ; we would have produced it long
ago if you had asked for it.
Mr. Depew — Yes, we will produce the contract.
The Witness — I should like to explain to the Committee
that Mr. Sterne put some sharp questions to me, last night,
bearing upon my lack of knowledge as to the contract of
Wagner with the company, and I want to explain that when I
connected myself with the company seven years ago Mr.
Wagner was running his cars, and they have been running ever
since ; the arrangements were made before I came there, and
after I took charge of the passenger business, I did not keep
the accounts, and have nothing to do with keeping the accounts
of the company, and therefore never had any occasion to look
at that contract ; if I had need to look at it, or if in the per-
formance of my duty it required me to look at it, I should
have done so, and then of course I would have been more
familiar with it than 1 am now ; the fact is, I never saw it, and
never had any need to see it.

Mr. Depew — I will state in regard to that ten cents on the
bridge, that I will inquire about it, and will furnish you to-
morrow morning exactly what the $ .10 is; it is an authorized
charge any way, under our charter ; $3.10 is our mileage charge
to .^bany including the bridge.
U

442

The Chairman — According to the distance ?
Mr. Depew— Yes ; $3.10 is the mileage charge, according to
the distance.

By Mr. Steene :

Q. Will you look at this copy of voucher (showing witness a
paper) ; is that the form in which you make out your vouchers
to the Merchants Despatch Company? A. No, sir,

Q. Can you furnish the Committee witlia copy of a voucher
such as yon mentioned? A. I have already done so in the
shape of the books that I have furnished, and which are in
your possession.

Q. A cofiy of the voucher ? A. You will find a copy of the
voucher there, I am quite confident ; you can give me the
book, and I think I will find one for you (taking the book) ;
book No. 8, page 321 ; I find on this page copies of two
vouchers in favor of the Merchants Despatch Transportation
Company, made on the 7th of July, 1876, for New York Cen-
tral & Hudson E/iver Railroad Company's proportion of com-
missions on freight shipjied by the way of the M. D. T.
Company during May, 1876, .f 1,313. 20; and there is another one
dated the 7th of July, 1876, in favor of the Merchants Despatch
Transportation Company, for New York Central & Hudson
Eiiver Railroad Company's proportion of overcharges on freight
shipped by the Merchants Despatch Transportation Company
during May, 1876, $6,76(:.73.

Q. These overcharges represent agreed special rates, do they
not? A. Not altogether.

Q. Well, substantially? A. They might cover a regular
overcharge or rebates, or drawbacks ; it is a gross amount.

Q. Wouldn't by far the greater part of it represent agreed
drawbacks or rebates ? A. I should say yes, it would.

Q. How do you become satisfied that these rebates or draw-
backs are agreed to under the general system that you have
in relation to it, if you have any ? A. Once a month a meet-
ing of all the roads over which the line runs, is held, the roads
being represented by the general freight agents, and the
vouchers are examined, and each voucher shows the pro-
portion due from each road, and those proportions are aggre-
gated into a statement which is sent to our general freight
office, and the vouchers made up from that.

443

Q. Does the paper which you call a statement reveal any-
thing to you except the agreed rate, the agreed rebate, and
the sum total of that ? A. It gives all the information that is
desired.

Q. That answer does not give to us the information that we
desire ; what information do you get from that statement
other than that which I have mentioned ? A. From the state-
ments which are sent to the general freight office?

Q. Yes? A. Nothing in that ; all the detailed information
has been obtained at this meeting that I refer to ; it is a sort
of a clearing-house arrangement between all the railroads in-
terested in the different lines.

Q. Are there any railroads interested in the Merchants De-
spatch Transportation Company ; I understand you to say that
is a non-co-operative line ? A. Very well ; the business is done
with the railroads just the same a'^ if it were not, and I am in-
formed that a great many of the railroads are stockholders in
the Mercliants Despatch, but of that I have no actual knowl-
edge.

Q. Tou do not know whether the New York Central is or
not? A. I don't know positively ; I have been told that it is
the largest stockholder, and holds a large majority of the stock
— owns it.

Q. Do you mean by that the New York Central, or Mr. Van-
derbilt personally ? A. No ; I mean the New York Central
& Hudson Eiver Railroad Company.

Q. Then this overcharge represents agreed rebates, doesn't
it? A. Not entirely.

Q. Well, to the extent that it represents agreed rebates or
drawbacks, it represents practicallj' the same thing, does it
not — what we find in these books as special rates ? A. Prac-
tically, yes.

Q. So that, in addition to the special rates which are made
by the New York Central Eailroad, there are these special
rates made by the Merchants Despatch Company ? A. No,
not at all ; if they are made, tliey are made either with the di-
rection or the consent of the New York Central & Hudson
River Railroad Company.

Q. How is your consent obtained ? A. They ask for it.
Q. In each given case ? A. In e;ich given case.
Q. Belore they name a rate ? A. Yes.

44i

Q. Now, take these other Jines which run over your line—
the Canada Southern, the White Line, Blue Line and the Eed
Line ; is that practicaUy or substantially the same method of
doing business with them ? A. Yes.

Q. A voucher is made out similar to this one ? A. Yes.

Q. Can vou find me one with the Canada Southern ; if in
your search you find one for any of the other lines, you might
as well mark that ? A. (Reading from letterpress copy book,
page 316.) "New York Central & Hudson Eiver Railroad
Company to the Blue Line, debtor, 6th of July, 1876. For
New York Central & Hudson Eiver Railroad's proportion of
expenses on freight shipped by the way of the Blue Line during
May, 1876. General expenses, |2,-29 1.74. Terminal charges,
$163.50. Total, $2,455.'24 ;" " New York Central & Hudson
Eiver Railroad Company to the Blue Line, debtor, 6th of July,
1876. For New York Central & Hudson River Railroad's
proportion of overcharges on freight shipped by way of Blue
Line during May, 1876, $5,'236.49 ;" will you take another ?

Q. I will ask you one or two questions as to that page first ;
the item of overcharge there corresponds with the item of over-
charge, as to its nature, with that of the Meichants Despatch,
does it not? A. It includes eastbound freight as well as west-
bound.

Q. And substantially those items of overcharges are also
special rates ; when divided into individual items they would
amount to special rates ? A. What you would call special
rates.

Q. Weil, what you call special rates ? A. Not entirely ; I
explained in some former testimony that when the rate varied
from the tarifi' we did not consider it a special rate ; that it was
a rate that was open to any one who wished to ship, although
it might be way -billed at a greater rate than was ultimately
charged ; I want to further explain in regard to that, that on
the eastbound freight we would not have it so if we could help
it ; we would rather have the freight billed at the actual I'ate
and be saved all this trouble and expense of paying back ; but
the western roads have done the business in that way, and it
has come to us, and we couldn't very well help it.

Q. Didn't you do it on westbound freight precisely in the
same way until the pooling arrangement went into effect? A.
We did at times, not all the time.

445

Q. And yet iu each individual case you say that your assent
is first had ? A. On westbound, yes.

Q. Not on eastbound ? A. Not on eastbound.

Q. You cannot state then how much of that rate was west-
bound, and how much eastbound? A. On these bills? No,
I cannot.

Q. In the case of westbound it would be a special rate —
even what I call a special rate — would it ? A. Yes, very laige-
ly ; there are some overcharges that even you would undoubt-
edl}' call legitimate.

Q. That is, those which are legitimate overcharges, you
mean? A. Yes.

Q. Now let us have another one of those vouchers, if you
please? A. Page 317 of the same book :

" New York Central & Hudson River Railroad Company
to the White Line, debtor. July 6, 1876. For New York
Central & Hudson River Eaihoad, proportion of over-
charge on freight shipped by the way of the White Line, dur-
ing May, 1876, $11,575."

Q. That is substantially made up of rebates and drawbacks,
isn't it ? A. Yes, substantially.

Q. The same as the others ? A. The same as the others.

Q. Now, let us have the next one ? A. Bame page, same
book :

" New York Central & Hudson River Railroad Company
to the White Line, debtor. July 6, 1876. For New York
Central & Hudson River Railroad, proportion of expenses
on freight shipped by way of the White Line, during May,
1876. General expenses, $-2,663.33 ; Terminal charges, $1,046.-
79. Total, $3,710.12."

Q. Does that contain the item of drawbacks ? A. The last
one — it does not.

By Mr. Depew :

Q. Are all those items overcharges oi; expenses? A. The
first one was overcharges, and the last one was expenses ; that
is, the first one on this page.

446

By Mr. Sterne :

Q. The vouchers that represent the expenses are different
vouchers from those that represent overcharges ? A. Yes, sir;
they are made separately.

Q. Therefore, the vouchers that you speak of, overcharge
vouchers, contain nothing of the expenses at all ? A. No.

Q. What you call terminal charges — how are they made up?
A. Those teiminal charges are io New England; there are a
lot of little roads there, whose lines are too short to accept a
mileage proportion of what we term aj/jco rata division of the
rate, and they are allowed this amount as a terminal expense ;
that is, as a jmrt of that terminal expense.

Q. Then these do not embrace, if I understand you right,
any of the terminal charges in the City of New York ? A.
There are no teiminal charges made in the City of New York.

Q. You do not divide in any way the expense of your termi-
nal facilities from the haul ? A. We divide what we call the
lighterage charge with our western connections.

Q. Do you divide in any way the expense attending the un-
loading of goods at your depot? A. No ; we do not.

Q. That you consider equalized by the expense which the
road at the termini has to pay ? A. I won't say we consider
it equalized ; we think our terminal expenses are very much
heavier than other roads, but it is one of those things that we
can't arrange.

Q. But you do not divide in your freight bills the expense of
the haul from the expense of the terminal charge ? A. No ;
except as I have said, in the question of the lighterage.

Q. You have stated, have you not, that these last vouchers
are of the same nature as the others ? A. All these that I
have read, and those that I propose to read are all of the same
character ; they all mean the same thing.

Q. Will you please read another? A. Page 319, same book :

" New York Central & Hudson Eiver Railroad Company to
the Canada Southern Line, debtor, July 7, 187'j ; for New York
Central & Hudson Eiver Eailroad proportion ot expenses on
freight shipped by way of Canada Southern Line during May,
1876, general expenses $1,845.47; terminal charges, $263.99 ;
total, $2,109.4 i ;" on the same page :

"New York Central & Hudson Eiver Kailroad Company, to
the Canada Southern Line, debtor, 7th of July, 1876 ; for New

4J7

York Central & Hudson River Railroad proportion of over-
charges on freight shipped by way of Canada Southern Line
during May, 1876, $3,032.19;" that is all.

Q. Does the same system still prevail? A. Yes.

Q. Has prevailed how long? A. Ever since the date of
those contracts there; the only one that is of recent date is the
Canada Southern ; the Red Line, the Blue Line and the "White
Line, say from ten or twelve years.

Q. Then there would be found on your books spread through
a course of ten or twelve years, down to the present time,
vouchers of a like character as those which were read, differing
only in amounts and dates? A. They would be found some
where in the accounts of tlie company.

Q. They are substantially ]the same thing? A. They are, yes.

Q. To whom does the depot at Forty-second street belong,
do you know? A. The Harlem Railroad Company.

Q. And tlie New York Central & Hudson River Railroad
Company have a lease from the Harlem? A. Yes.

Q. How long has that lease been in existence? A. I cannot
tell 3'ou.

Q. Ever since the building of the depot ? A. If you will let
me ask Mr. Depew.

Q. Oh yes ; I will let you ask Mr. Depew for anything.

The Witness — How long is it Mr. Depew ?

Mr. Depew--! think since 1871.

The Witness— I think since 1871.

Mr. Steene — That shows a touching confidence in your
Counsel.

The Witness — T will swear to anything Mr. Depew says.

Q. Has any modification been made in that lease since the
building of what is known as the Fourth avenue improvement?
A. Not that I am aware of.

Mr. Steene — Now, Mr. Depew, we will let you testify again >
has there been any ?

Mr. Depew — The Harlem Railroad Company, above Forty-
second street, since that, has been leased to the New York
Central & Hudson River Railroad Company.

The Witness— I thought I testified that it was leased be-
fore.

Mr. Depew — The first lease was a lease of depot privileges;
the second was a lease of the steam line of the Harlem road.

448

Mr. STEiiNE — Is that the whole Harlem road is now under
lease to the New York Central ?

Mr. Depew- -No ; the Harlem road runs to the City Hall.

Mr. Sterne — What part of the Harlem road is under lease
to the New York Central ?

Mr. Depew — North of Forty-second street.

Mr. Sterne — From Forty-second street to Albany ?

Mr. Depew — No ; it runs to Chatham.

Mr. Sterne -Connecting with the Boston & Albany?

Mr. Depew — No ; there is no connection ; the Harlem road
is a local road purely ; it has no through connection at all.

By Mr. Sterne :

Q. "What do you charge for cream on the line of the Har-
lem road ? A. I think we charge the same as we do for milk ;
but I am not positive about that — if we carry any cream ; I
am not aware that we carry any ; perhaps we do.

Q. I am informed that you charge 60 cents for that still ?
A. I am not competent to answer that question.

Q. You don't know ? A. I don't know.

Q. Can you tell me possibly, whether it costs more or less
to handle a can of milk than a barrel of flour or a barrel of
potatoes ? A. I should say it did.

Q. At the terminus ? A. Anywhere.

Q, Why ? A. Because it has to be handled in an entirely
different manner ; it takes two men to handle a can of milk ;
for they have to fake it up and carry it very carefully to
some other place, and set it down ; anri a barrel of flour, one
man can kick it from one place to another very easily.

Q. And is not one of those men supplied by the milk men at
one end of the line, and by the farmer at the other ? A. Not
at this end of the line that I know of ; I don't think they are.

Q. You never get up early enough to see the unloading of
the milk cans ? A. Yes, I get up early enough to see the un-
loading of them, but I don'l go to see them.

Q. So you don't know whether the milk men here, at this

end of the line A. Not positively, but I don't think

they do ; and the result of my inquiry among our men is that
they do not.

Q. And at the other end of the line ; have yuu ever gone

449

over 'your milk trains to see the method of doing •business? A.
No, I have not.

Q. You don't know whether the farmers handle the milk?
A. I know upon gsueral information that in somo cases tliey
do.

Q. If you charge 60 cents per can for cream, you don't know
why that difi'erence is made between milk and cream? A. I
would not express an opinion, as I don't know that we carry
any cream, and I don't know that we charge 60 cents for it ; I
do know, though, that Kilmer and his crowd have put 15
cents of our money into their pockets ; they forced us to
reduce our rate, and the result ot my inquiries last night and
this morning is that the farmer has not got a cent of it, and
the public has not got a cent of it, and they have got it all.

By Mr. Depew :

Q. They are the middle men ? A. They are the middle
men.

By Mr. Stekne :

Q. Why should not they have it as well as you ? A. Why
should not we have it as well as they? that is the question.

Mr. Depew — These middle men at Albany urged this reduc-
tion on the ground that it was for the benefit of the farmers
and the public, and they have taken all oi it themselves, and
have not given a cent to either the farmers or the public.

Mr. Sterne — Well, I will find out.

The Witness — I have found out already ; / know.

Q. Do you think you could have maintained your rate at 60
cents ? A. Certainly, I know we could.

Q. That is on the ground that it will bear that ? A. On the
ground, yes, that it would bear it, or any other way you choose
to put it ; we could have maintained it.

Q. You charge more for milk than you do for first class
freight, on the same distance, twice over, don't you ? A. I
would not say whether it is twice over, but we do charge
more.

Q. The average distance that milk comes is about 50 miles,
isn't it ? A. That would be a pretty hard question to answer ;
if you want to know the average distance that a train runs I
will say about 50 or 60 miles.
45

450

Q. You laibw what a passanger train earns, don't y6u— a
local passenger train on the Harlem Eailroad ? A. No, I do
not.

Q. You never entered into a computation in jour office as
Traffic Manager of passengers as to what a local train say,
from Poughkeepsie to New York earns? A. T have not.

Mr. Depew— I will state that the whole earnings of the
Harlem Eoad for 50 miles out don't jiay the expense of keep-
ing up the stations. Why don'f yon draw out that they carry
back empty cans for nothing ?

Mr. Stekne — Well, he can state that.
The Witness — We do carry empty cans for nothing.
Q. You don't carry hack freight on those trains ? A We
don't carry any freight on milk trains but milk and milk cans,
to my knowledge.

Q. Have you any freight that will fill those cars? A. No;
the cans till them ; the cans take up ns much room when they
are empty as when they are full.

Q. How many cars of freight do you carry for the same
distance on the Harlem Eailroad a day? A. I don't re-
member.

Q. Have you any means of giving us an estimate of how
many box cars per day of fieight you carry on the Harlem
Eoad other than milk? A. I think I can.

Q. Will you give it to this Committee? A. I will if I can.
Q. Per day ? . A. Per day ; do you want it for every day
for 865 days ?

Q. Oh, no ; an average ; I am quite sure you will give us a
just and proper average ; you have told us as to one-third of
the cars that oomefrom the west — you carry them back empty?
A. Did I tell you one-third ?

Q. I think you did. A. I don't -think I gave you any defi-
nite reply to that.

Q. I don't want to manufacture testimony for you ; is that
your impression ? A. T don't care to say how many empty cars
we carry back ; I don't believe I can tell you ; we carry a great
many cars back empty that we cannot load with anything —
cattle cars, oil cars, tank cars, lumber cars ; I think compar-
atively very few of our box cars which are fit to carry mer-
chandize go back empty ; some of them may.

Q, In making up a freight tariff or a special rate do you

451

take iato consideration any element except the interest of your
road V A. In making up a freight tariff ? '

Q. Yes. A. Yes ; I think I should.

Q. What elements do you take into consideration ? A. I
take into consideration the interests of the road and the in-
terests of the particular trade for which the tariff was made ;
we sliould not want to make a rate on corn that would stop
the shipment of it, nor on mowing machines that would stop
the movement of them ; we should undoubtedly get all we
could for our services.

Q. Would you take into consideration the interests of the
public at all ? A. The interest of the public that do busi-
ness with us, yes.

Q. You mean that particular individual that does business
with you ? A. The particular class of individuals ; I think
if I was making a tariff dn flour I should not consider the in-
terest of yourself, but I should of the man that shipped it, and
the man who was to receive it and pay us our money.

Q. For instance, in the case of a demand tor a special rate
from a manufacturer, say at Fishkill, you would take into
consideiation his special interest, wouldn't you, as well as
your own ? A. In that one case ; yes.

Q. And you would make him a special rate to suit his par-
ticular business ? A. I would as far as possible, consistent
with our own interest.

Q. And each particular case of that sort stands upon its
own bottom? A. No ; not entiiely ; if there were two men of
the same place, in the same business, wanting to ship to the
same place, we would make them both the same rate.

Q. Would you, quite independent of the amount of their
shipment? A Perhaps not entirely independent of that ; but,
if one man shipped one cai' load and another man shipped two
car loads, I don't think I would make any difference in making
a rate, so that lie gave us the freight so that it would be eco-
nomical to us to move it.

Q. You think then a car load is the real unit on the basis
of which the rate ought to be fixed ? A. Not entirely ; I do
not.

Q. Is there any unit on the basis of which a rate can be
fixed ? A. No, I don't think so.

452

Q. There is noue in your own mind ? A. It is governed en-
tirely by circumstances.

Q. You don't mean general circumstances ; you mean the
special circunistances of each case? A. Perhaps so ; I think
if I were left free to use my judgment in making a rate, and
was not bound by any other rule than that which I considered
would be for the best interest of the company, that a man who
would offer to give me regularly for transportation over the
road a specific quantity — making up one or more full trains of
an article all alike — that I would make considerable of a con-
cession from that rate, believing that we could do the business
more economically and with greater despatch.

Q. You say to such a man as that — take, for instance, A. T.
Stewart's factories — some of them are along the line of your
road, are they not ? A. Yes.

Q. To A. T. Stewart & Co., for instance, you have a special
rate ? A. We do, I believe ; we did have.
Q. You have still? A. I tliink so.

Q. How does that rate differ from the rates that you give to
other manufacturers at the same place ? A. I couldn't lell you
that ; I should say it ought not to differ very materially.
Q. It does differ, doesn't it ? A. Perhaps it does.
Q. In consequence of the large quantity of the shipments
made from these factories ? A. Yes, and various other cir-
cumstances connected with it.

Q. What are those other circumstances, because, if possible,
this Committee, I believe, would like to know precisely upon
what basis you make your freight charges ? A. We are governed
largely by competition in making our arrangements with A. T.
Stewart & Co.

Q. Were not you governed equally as much by om pe-
tition as to the manufactories of other people at the same
place ? A. I think we were ; I don't remember that there are
any factories at the same place that Stewart's factory is.

Q. Where are Stewart's factories situated ? A. I don't
remember all of them.

Q. Name some ? A. He has one up at a place — I think it is
called Gleuhatn ; it is not far from Fishkill ; I think he has
another one at Catskill ; another one at Utica ; and I don't re-
member the others.

Q. You are not prepared to swear now that the other man-

453

ufacturers at Fishkill, at Catskill, and at Utica, have the same
rates that Messrs. Stewart & Co. have ? A. No ; I am not
prepared to swear.

Q. Is tliere another factory at Mattewan? A. I <lo nut know.

Q. At Stuyvesaut ? A. I do not know.

Q. Would these books contain the special rates to A. T.
Stewart & Co., as compared with the special rates to other
manufacturers? A. No; the books the Committee have been
examining at Mr. Goodman's office would contain that

Q. If you do make a varia|iion of the rate to Stewart as com-
pared with smaller manufacturers, don't you, now, in your own
mind, consider that a discrimination against the smaller man-
ufacturer.s, although it may be forced upon you by the neces-
sities of your business? A. No ; I do not.

Q. You do not think it puts the smaller manufacturers at a
disadvantage with A. T. Stewart & Co. ? A. That is a matter
of opinion; I would not venture to give an opinion on it.

Q. That, in addition to the misfortune of having smaller cap-
ital, he is also saddled with the misfortune of having freight
charges against him ; you do not consider a discrimination
against him ? A. I do not say anything ; I do not consider it
a discrimination.

Q. You regard jour office and function in j'our railway as
attending to a private business, don't you ? A. If you would
call the stockholders of a railroad their business a private
business, I do.

Q. What I mean is this : you are an intelligent man, who
has had considerable experience in railroad matters ; I want to
get at your view of your function ; you regard the business
you are doing as a private business, don't you, as much so as
Mr. A. T. Stewart's factory is a private business? A. No, not
entirely ; bnt I do not think I am serving anybody except
the stockholders in my duties.

Q. You do not think you have any business to regard any
body except the stockholders ? A. Oh, yes, I do ; because I
think it is to the interests of the stockholders that I should
do so.

Q. No, but for instance — let us understand each other ; I do
not want to misquote you — except the special man who is
dealing with you, and the stockholders, you do not think that

454

there is any other interest to be looked after in your business
of transportation ? A. Yes, I should.

Q. Whose interest? A. Well, it would be all the time look-
ing out for the stockholders' interests ; I would not consider
that I was serving the interests of the stockholders by making
a rate so high as to —if I was transporting freight from a point
from which there was no competition, and nothing else gov-
erned me in my rate — I would not consider that I was serving
the interests of the stockholders in making a rate so hii'h as to
debar the general public from shipping or moving that article,
whatever it. might be.

Q. That you would do also in the interest of the stock-
holders ; you would stop short of stopping the transportation,
of course ; is that what you mean? A. I serve the stock-
holders.

Q. Only? A. I serve the stockholders only.

Q. That is what I want to get at — whether you had any
other point in view but that; you make the same rate— we
have the fact from Mr. Vila's that the New York and Erie
makes ; the same rate from Boston on westward bound freight
as from New York — you make that rate, don't you? A. No ;
we do not make it.

Q. The Boston and Alb my road makes it? A. Yes, sir.

Q. And you loUow the Boston and Albany road, precisely
in the same mauner as the Erie follows the Boston and Albany
road ? A. The Boston and Albany, under a general arrange-
ment with us, has the right to make rates over our road, we
retaining the right to object to them if they make them too
low, and we do object to their making them less than they are
from New York under any circumstances-.

Q. But you do not object to their making them from Boston
to western points, at the same rate as from Nuw Nork ? A.
We do not.

Q. Why don't you ? A. That rate has been in force that
way for a great many years ; long before I had anything to do
with it ; it would be a very difficult thing to change it.

Q. The Grand Trunk Line from Boston to Chicago is how
many miles? A. I do not know; I have a memorandum of
that distance somewhere (referring to memorandum) ; I find I
have not got the figures to give you the distance from Boston
to Chicago by the Grand Trunk Railroad, but my recollection

455

is that it is about 150 miles longer than our line — longer than
our line from Boston.

Q. And yet they make rates as low, it not lower than you
do from Boston? A. Yes, sir

Q,. And they insist, don't they, under the new arrangement

that you have made with them A. They always insisted

upon it, and always did it.

Q. Now you have agreed by contract to let them make lower
rates, haven't you? A. We have not agreed by contract to
let them do it.

Q. Didn't I understand yon to testify very early in the testi-
mouy that we have taken here from "^ou, that there is an agree-
ment now between you and the Grand Trunk, or between the
Boston and Albany representing you, and the Grand Trunk,
as to the rates to be maintained from Boston, and that they
are to be the same as those from New York, with a slight dit-
ference in favor of the Grand Trunk, they being permitted to
charge lower rates ? A. I do not think I testified to that, but
nevertheless substantially that is the fact, but it was done
without our consent and against oiir protest, and it is one of
those things that people get forced into in spite of themselves;
but the Grand Trunk Railroad claim that they cannot get any
freight to carry unless they carry it at less than we do.

Q. That is because it is a longer line ? A. A longer hue and
they get snowed up in the winter, and get blocked up, and the
Detroit River gets frozen up and they cannot get across.

Q. So the reason that they charge less is because they have
more difficulty in transporting, and they transport for a greater
distance? A. I do not say it is because they have more diffi-
culty.

Q. But that is the reason they allege ; now, tell us, when
the freight agents or traffic managers come in contact with
you, and make that claim to you, do you acquiesce in the jus-
tice of it ? A. No.

Q. You do not think that the railway corporation has a right
to make a less charge because of greater difficulties to over-
come and the longer distance? A. No; if I did, we would
have to charge less from Chicago to New York than they do
from Chicago to Baltimore, because they are shorter than we
are.

Q. Yes, of course, so, in the one case. New York is placed

456

■at a disadvantage because it is a longer distance, and in the
other cape it is placed at a disadvantage by reason of its being
shorter ?

Q. If the rate from Boston wn s as low as from New York,
and house rent and store rent is higher in New ^ork than in
Boston, and freights from Boston are the same to Liverpool
as they are from New York ; if those conditions aie true, i^n't
New York i^laced at a disadvantage compared with Boston ?
A. I have studied freight questions a great deal during my
life, but I never went quite so deep as that; I never took into
consideration the question of house rent.

Q. Take it into consideration now? A. I cannot do it; it
is too big a question for my poor little head.

Q. Let us see whether you can ; we will divide it up ; the
rate of freight from Boston to Chicago is, as you say, the
same as it is Irom New York, westbound? A. Yes, sir.

Q. A merchant doing business on Milk street, in Boston,
has a warehouse at 15,000 a year rent, say, as compared with
a warehouse of the same character and the same capacity at
$l'>,OuO in the City of New York ; his house rent is in the
same profiortion reduced as compared with New York liouse
rent, property in Boston not being so high as in New York ;
freights from Liverpool to Boston being the same or little less
than freights to New York ; couldn't that merchant in I'oston,
therefore, do business at somewhat a lower rate of profit than
the merchant in New York, the freight rates to Chicago being
the same and the business being to Chicago? A. I believe
the New York merchant would do the largest business.

Q. He could do the largest business? A. Yes, sir.

Q. Under that state of facts ? A, I believe that, from the
statement that you made last night, that if all the railroads
running through the State of New York were tied up and
obliged to carry freight at certain fixed rates, and could not
meet competition, that the natural advantages of New York
would draw the trade to it anyhow; I know there naturally
must be something that does draw trade to New York, for
New York does lour times as much business in westbound
freight as, for instance, Boston and one-half of the New
England States put together.

Q. Isn't it the Erie Canal that draws the business to New
York ? A. I am only talking of what is done by railroads and

457

not by canals ; tlie canals would be added to the figures I have
in my mind.

Q. Is it not the fact that the Erie Canal bringing business to
New York at a lower rate than it is brought to Boston during
six months in the yea^, is the cause of the prosperity of the
City ? A. We have been talking all the time about west-
bound freight — are you taliiing about east-bound now ?

Q. Yes ; that the business is centered in New York by rea-
son of the canal, and it does its western business for the same
reason? A. I do not think I would quite agree to that.

Q. Hasn't the question of the amount of capital of the
Grand Trunk Railroad something to do with what they see fit
to charge ? A. I do not believe it has the slightest to. do
with it.

Q. I have heard Mr. Depew say that one of the reasons why
they can afi'ord to run so cheap is because they are insolvent ;
do you agree with him ? A. I do not believe that the ques-
tion of their solvency or insolvency ever entered into their
heads when they made rates ; they are bound to cut them and
make them less than we do, every time they get a chance, and
if they did not do it, I don't believe they would get much
business.

Mr. Shipman — I suppose the fact that they are insolvent
gives them a freedom in that direction — to cut rates ?

The Witness — Perhaps it does ; I do not believe they ever
stopped to think about that though.

By Mr. Steenb :

Q. You do dot accept Judge Shipman's theory about the
reason why the Grank Trunk can afi^ord to run cheap ? A. I
am not giving evidence for Judge Shipman.

Mr. Shipman — I did not say they could afford to run cheap.
My question was as to the fact.

Q. Well, why they do run cheap ; do you agree with him as
to that ? A. I have nothing to say about that ; put him on the
stand.

Mr. Shipman — I did not say that was the reason ; I asked the
question whether or not the fact that the Grand Trunk was
desperately insolvent, did not render it less scrupulous about
cutting rates, probably, tha,i} it would be if it was a solvent
foad.

458

Q. I wish you would answer that question of Judge Ship-
man's as fully as yon can ? A. Perhaps it might ; I cannot tell
what governs the managers of that road in their policy.

Mr. Depew— The real reason is that they cannot get any
freight unless they take it at a less rate than anybody else.

. The Witness— I was talking about westbound freight which
people want to get through quickly, and be very sure of getting
through, when I said that ; I do not think it applies as much to
eastbound freight.

Q. What difference is there in the time between the delivery
of freight from Boston by the Grand Trunk there at Chicago,
and the delivery of freight there by your road, and the Boston
and Albany ? A. Perhaps at this season of the year there
would not be very much difference.

Q. Would there be any ;.would not, in consequence of their
having less freight and being less crowded, the freight be de-
livered, as a general rule, quite as regularly as freight business
done over a road more crowded ? A. They claim that they
cannot ; that is the reason they give for wanting to make lower
rates.

Q. You do not believe them entirely ? A. ¥es, sir ; I do ; I
do not know as I ever meant to let them know that I believed
in it ; but since you have drawn it out of me, I do ; I always
tried to p. rsuade them that they ought to charge as much as
anybody else did, but they would not believe it.

Q. Then you also believe that jiart of the story that they
give you, that the reason that they must charge less is because
they have those additional difficulties to overcome and the in-
creased mileage to overcome? A. They might allege that
their increased mileage made them longer in getting freight to
its destination, and therefore they should charge less; they
have always given every conceivable reason they could think of.

Mr. Depew — In the winter they have more trouble?

The Witness — They undoubtedly do, except perhaps they
did not have quite so much as we did last winter; but the prin-
cipal reason that the Grand Trank Railroad urge for making
less rates than we do is that their road is blocked up such a
large portion of the year that they cannot retain regular cus-
tomers without buying the freight.

Q. Now those rebate charges that you have read off to us
here, which are paid by your corporation to these-T'arious fast

469

freight lines, they represent rebates and drawbacks on goods
shipped from Boston as well as goods shipped from New York,
don't they? A. Undoubtedly they do.

Q. Therefore the shipments which run out of Boston are
equally subject to the special rates ; lower than schedule )ates
by such rebates and drawbacks? A. Not now ; two years or
more ago they might have been governed by the same rules
that govern New York business.

Q. You now are speaking of eastbound freight ? A. No, I
am speaking of westbound.

Q. Do you mean to say that for two years last past there
have been no rebates and drawbacks on shipments made from
Boston ? A. Not that I know of ; we have not paid any.

Q. In the vouchers that you make to the Merchants Des-
patch, and the Bhie Line, and the White Line, and these
various other lines, Canada Southern, <.tc. ; none of them repre-
sent a single item of rebate or drawback for Boston business ?
A. Not to my knowledge ; and it would not be done if I
knew it.

Q. They represent rebates and drawbacks only as to New
York business? A. No; there is no rebate or drawback on
New York business.

Q. What rebates and drawbacks do you have ? A. That is
to say, that ive make ; they may be made by roads west of us ;
I am only speaking now of what we do ourselves.

Q. On eastbound freight to Boston, they represent rebates
and drawbacks, don't they ? A. Yes, sir.

Q. Even now ? A. Yes, sir ; I presume so.

Q. And to Boston as well as New York ? A. To Boston as
well as New York.

Q. How much of these vouchers, or vouchers of the same
character, represent Boston business as compared with New
York you do not know? A. I cannot tell you.

Q. You were asked to give to the Committee a statement
of what the proportion of New England business as compared
with New York business was ; have you been able to furnish
that ? A. The information is being sought for ; we will prob-
ably know by to-morrow whether we can give it ; I doubt very
much whether we can give the information that has been

asked for.

Q. Can you give the information as to the total amount of

460

tlie freight traffic and passenger traffic of your road? A. Of
the total amount ?

Q. Yes, the income ? A. Oh, yes, sir.

Q. Is that contained in the engineers' report? A. Yes, sir.

Q. Is butter first class freight ? A. No.

Q. What class does butter belong to ? A. It is a good while
since I looked at a classification ; I think it is in the second
class.

Q. Do you carry that at a special rate ? A, We would if
we thought there was any necessity for doing it.

Q. Are there instances of butter carried at special rates,
through those books, from the West? A. I do not know ;. if
there are any such instances they show in the books whicli the
Committee has been examining — the books in Goodman's
office.

Q. No ; I think not, because those books would show no-
thing except from western points to local points within the
State, and from local points within the State to western points ;
these books which you have more recently produced are the
books which show the discrimination ? A. I understand what
you mean now ; you are talking about through business.

Q. Through business ? A. I cannot tell you that.

Q. Mr. Goodman has told us that it is only the fourth class
that varies with the through business? A. It is only the
fourth class that varies to any great extent.

Q. He has told us as to fourth class, you have no schedule
at all ? A. He says so ?

Q. He says so ; and that is true, isn't it ? A. Let me see a
tariff there, and I will tell you ; I do not remember.

Q. Look at this (handing witness a tariff) ? A. Well, it
don't.

Q. When you carry butter from the West, at a special rate,
how do you vary your second class to correspond with it —
you don't, do you ? A. I really could not tell you ; I do not
think we carry much butter from the West at special rates ;
we may do it ; however, I do not know ; I do not think we do.

Q. How could this Committee get the information? A. I
do not know how they could get it; they might get it at Chi-
cago.

Q. Wouldn't these books disclose what the article is ? A.
I do not think they would ; no.

461

Q. Have you any estimate in your own mind as to what pro-
portion of your business over your road is done by the various
fast freight lines, as compared with what is done by the New
York Central itself ? A. There is none of the through busi-
ness done except by the fast freight lines, except the business
from Buffalo.

Q. Then the business of the New York Central proper, is
confined to its local busioess almost exclusively ? A. Yes, sir ;
if you choose to call Buffalo business local.

[Intermission. ]
J. H. Butter, recalled.

By the Chairman :

Q. Mr. Butter, I want to ask you in relation to the Harlem
Bailroad, that is a road that is leased to the New York Cen-
tral, is it ? A. Yes, sir.

Q. "What is its northern terminus ? A. Chatham.

Q. On the Boston and Albany Road ? A. Yes, sir.

Q. Do you do any through traflSc over that road ? A. Very
little ; none to be called through traffic.

Q. Then the traffic of the road is principally local traffic?
A. Entirely so.

Q. Does it connect with any road in Connecticut ? A. There
are roads which cross it running into Connecticut ; no parti-
cular connection.

Q. What is the amount of through traffic which you do upon
that road ? A. I could not give it to you from memory.

Q. Of course I don't expect you to give a definite answer ;
can't you estimate it ? A. No ; I cannot at present.

Q. Can you give the Committee an idea of about the amount
of traffic in tonnage done during the past year and during the
present year? A. I cannot from memory.

Q. You could not give it approximately ? A. No ; I could
not.

Q. How is it about the passenger traffic on the road; what
amount of that is done — has been done during the past year ?
A. I cannot give you any of those figures from memory ; the
reports as they come to me are all merged into the general
business of the road.

462

Q. The road, including the leased lines and all? A. The
road, taking the New "York Central & Hudson River Road,
all comes to me in one account.

Q. The principal business is doue on the road fifty miles
from New York : I think it is ; yes, sir.

Q. I think Mr. Depew stated it did not pay for keeping up
stations beyond that? A. Yes, sir; he said so, and I think
that is correct.

Q. What is the length of the road ? A. About 129 miles,
I think.

The Chaieman — Were the leases of this road among the
papers called for?

Mr. Steene — No; they were not ; if the Committee wants
them I suppose, Mr. Loomis will fetch them.

By the Chairman :

Q. Will yon produce the lease of the Harlem Railroad to
the New York Central? A. The papers of that kind are not in
my custody ; I have nothing to do with them ; I will endeavor
to do so, though.

Q. Also of the Forty-second street depot — that belongs to
the Harlem River Road, does it not? A. I believe it does.

Q. And is leased to the New York Central ? A. Yes, sir.

The Chaieman — A copy of that lease we should like also.

Q. How is it about this Forty-second street improvement ;
does that belong to the Harlem Road — the Fourth avenue ?
A. Yes, sir ; I think it does.

Q. Has the New York Central anything to do with that?
A. I think not ; I think that was done by the Harlem Com-
pany.

Q. Has the New York Central a lease of it? A. It leases
it in common with the other property.

Q. The leases called for will cover that ? A. I think so.

Nelson B. Kilhner, sworn.

By Mr. Steene :

Q. Where do you reside ? A. Brooklyn.

Q. What is your business? A. Milk business.

Q. Where do you draw your milk from ? A. Where do I
draw it from ?

4G3

Q. '^s, sir ; where do you get it from ? A. My milk is pro-
duced in Orange County and ui Queens County.

Q. The Queens County milk comes over the Long Island
Eocid ? A. Yes, sir.

Q. What do you pay for the carriage of that? A. Thirty
cents per can.

Q. What distance does that come ? A. My milk comes
about thirty miles.

Q. Yonr milk produced in Orange County comes over what
road? A. Over the Erie Eoad.

Q. What do you pay for that a can ? A. I pay to the Erie
Road forty cents per can, delivered in Jersey City, and five
cents additional by the Erie Annex boat ; forty-five cents de-
livered ill Brooklyn.

Q. That makes it the same as that charged by the Harlem
Road? A. Same as by 'Harlem Road delivered in New York
City.

Q. What distance is it from Orange County to the terminus
at Jersey City ? A. Well, the distance is on an average about
fifty-five miles ; the milk stations in Orange County range from
forty to seventy miles.

Q. What is the average distance that the milk is shipped on
the Erie Road — do you know ? A. Well, I should say that
about sixty miles is the average distance from which the bulk
of the milk is shipped by the Erie Road.

Q. What is the average distance on the Long Island Eoad ?
A. About thirty ; there is some milk, I believe, shipped as far
as eishly miles on that road ; very little, though.

Q. What is the average distance on the Hudson River and
Harlem, do you know ? A. I should say on the Hudson River,
as far as I have investigated, the average distance which the
milk is shipped at the present time is sixty miles ; during
the winter some milk was shipped, I think it was from Mont-
gomery County, beyond Albany County ; I am informed now,
since the warm weather, it has to leave the station veij early
in the day or it cannot be shipped ; I know that from the fact
that a dealer in Brooklyn, who received a large amount, has
had to give it up because it would not be received sweet from
that distance ; say about sixty miles is the average distance.

Q. How is it on the Harlem ? A. About the same ; the
bulk of it, though, I think, is less than that.

464

Q. What did you pay until recently ? A. On the Erie fifty-
five cents, delivered at Oersey City, previous to tbe 1st of
May.

Q. With the five cents additional on the Annex makes six-
ty ? A. It makes sixty ; yes, sir.

Q. What was it on the Harlem ? A. Sixty.

Q. What was it on the Long Island Eoad ? A. It was thirty,
the same as it is now, and it is sixty on the Hudson River
Koad no^y on milk if it comes from Duchess County by the
way of the Duchess and Columbia Branch ; there has been no
reduction on that milk ; some 500 cans a day are shipped from
there at the same price as it has always been.

Q. A statement has been made here that since the reduc-
tion from fifty-five cents on the Erie and sixty on the Harlem
as compared with forty-five and forty, that the farmer does not
get the benefit of that, but that the milk distributor here gets
it ; how is that ? A. I should say that the producer — the
farmer — does receive the benefit of the fifteen cents a can and
a little more ; he receives five cents more a can ; he receives
one-half a cent per quart more by reason of this reduction ; and
to show you how I know it, these farmers who ship from
Duchess County, who have to pay sixty cents a can, the milk
pays the sixty cents ; we pay the freight on it ; the farmer re-
ceives one-half a cent less a quart for that milk than the
farmer in the adjoining towns who ships for forty-five cents a
can.

By the Chaikman :

Q. Do you buy your milk in Orange County ? A. Yes, sir.

Q. Do you buy it at the stations there V A. I buy it of a
farmer and he delivers it at the station.

Q. How much do you pay a gallon ? A. I paid eight cents
a gallon last summer.

Q. What did you pay. a month ago? A. A month ago the
same ; we paid the same in the winter or spring months.

Q. You pay the farmer now the same amount per gallon that
you did before ? A. Yes, sir ; but if this reduction had not
been made, we should not have paid him within one-half a
cent as much.

Q. That is because the milk is worth more in the winter
tJ^an it is in the summer, is it ? A, It costs more tP a}alie it :

465

it costs more to produce in winter; the difference is sometimes
two cents a quart.

Q. Are the rates higher in the winter ? A. Yes, sir.

Q. And the rate this summer is kept the same as it was last
summer? A. It is the some as it was last summer.

Q. Is it the same as it was last winter? A. Oh, no; it is
less than it was last winter ; the difference is not as great as
it has been heretofore.

Q. I don't see how farmers gain anything from this reduc-
tion ; you say you paid eight cents last year and eight cents
now ? A. The farmers originally receive five cents a quart or
twenty cents a gallon when it was worth more ; butter was
originallj' worth more than it is now.

Q. That is not the idea? A. Yes, sir ; that is just the idea;
the milk is worth just so much less this season than it was
worth years ago, and if it had been worth one-half a cent less
a quart this season to produce, it would not with the freight,
and that has been reduced — the milk costs us what it costs
delivered at our stores.

Q. Then the idea is this : the reduction of freight has in-
ured to the benefit of the farmer, because it has maintained
the cost of milk at that pric^, instead of its being reduced;
the farmer gets the same this season as he did last year? A.
Yes, sir; with the exception of those farmers in Dutchess
County who have to pay sixty cents ; the milk pays ttie freight ;
they don't get so much, but get one-half a cent less, and I
would say contracts were made on the Harlem Eoad at the
reduction of a cent and a half a quart before this freight was
reduced, and since the freight has been reduced they have re-
ceived one-half a cent more for it, because of the reduction; the
contract price has been changed because of this reduction.

By Judge Shipman :

Q. What do you pay the farmer for your milk that comes
over the Erie road? A. Two cents a quart; eight cents a
gallon.

By Mr. Stebne :

Q. Do they ever pay you any damages, if the cans do not
come full ? A. The railroad company ?

47'

466

Q. Tes, sir. A. They li.ivo paid me once for damage, be-
cause the brakeman spilt a can of milk ; they pay in case of
destruction of milk ; if by accident to a train the cans of milk
are destroyed, and you can easily prove that fact, they pay it ;
but we have shortage, taken out of the can, as we believe, in
transit, as the station agents say the cans are full when they
leave there, and when we receive them there are four or six
quarts out occasionally ; we receive no pay for that.

Q. What is the custom of milk men in helping in loading
and unloading the cars, and loading their own wagons ? A. It
is customarj' to give the brakemen five or ten cents to have
him roll his cans to the car door, and they take it out of the
car on the platform and in the wngons, themselves.

Q. They back up the wagon to the platform ? A. Yes, sir ;
opposite the car door ; they go in often and help themselves
to it; the brakeman sorts it around, so that those that pay
him get better accommodations than chose who do not, and if
he assists in putting it on the platform, they take it from the
platform into the wagon, but frequently they take it out of the
car themselves.

Q. What is the custom of the farmers in loading the milk ?
A. Where a station does not ship a full car of milk, and it is
placed on the platform, the farmer, of course, unloads on the
platform for the approach of the train, and the train comes
along and takes it, while if the station ships enough milk to
warrant a full car load, the car is put on the side track and
the farmer backs up his wagon and puts his milk into the
car ; I have seen him do it myself.

By Judge Shipman :

Q. Instead of putting it on the platform? A. Yes, sir.

By Mr. Stebne :

Q. Is he aided by any train hand in doing that? A. I didn't
see any train hand about it all ; afterwards I saw a young man
come and take a record of what milk had been left, and he
rolled it away from the door, so that the next man could put
his milk in the oar.

Q. Have you suftered loss by reason of milk not arriving on
time ? A. Yes, sir ; many a time.

Q. Have you ever been paid for that loss ? A. No, sir.

467

Q. Have you ever made claims for damage ? A. No, sir.

Q. Did they ever offer any payment for loss, by reason of
lost time? A. No, sir.

Q. What was the rate of transportation on the Erie road for
milk previous to May 1st, 1879 ; I think you said 60 cents? A.
55 cents.

Q. Do you know anything about the express coajpany un-
dertaking to deliver milk at less rates than 50 cents a can ? A.
Yes, sir ; I am informed that last fall, after the close of naviga-
tion, the milk shipped by boat from Peekskill was shipped
by express — by the American Express Company- -and delivered,
not at the station, but at the man's residence at 40 cents a
can ; at the same time the Hudson Kiver Railroad was
charging 60 cents a can from the same station delivered at
their depot; the gentleman who received the milk will testify
to that fact.

Q. Do you know how much milk is shipped on these various
roads? A. I have a very fair estimate and have the figures
with me that are published and are supposed to be correct,
every week, by the American Dairyman.

Q. You say you have the information? A. Yes, sir.

Q. Where did you get it from ? A. I have got information
myself from various sources ; from railroad officials and em-
ployes ; but I have something which is published every week ;
probably it is about as near correct as I can give it, with one
exception — they fail to get what is sent by boat ; these are the
figures for week before last ; the daily average receipts for the
week at various points of distribution were as follows : Erie
Railway, 175 cans of cream, 8,280 cans of niiik ; Harlem Rail-
road, 2,500 cans of milk; New Haven Railroad, 710 cans of
milk ; Hudson River Railroad, 480 cans of milk ; Midland Rail-
road, 1,210 cans of milk, and 60 cans of cream ; miscellaDeous
and near by roads, 1,600 ; by boat, 370 cans of milk — that is,
from Peekskill and Sing Sing: total, 10,150 cans and 40 quarts;
in addition to that, there are 700 cans of milk coming by boat
from Rondout, making about 11,000 cans of milk per day.

By Judge Shipman :

Q. That is the daily supply ? A. Yes, sir ; daily.

468

By Mr. Steene :

Q. Do you know wliat is charged by these various com-
panies on cream ? A. I know what the Erie Eailroad charges
for cream — 60 cents per can.

Q. As against 40 cents for milk ? A. Yes, sir.

Q. Is the cream put up in the same sort of can ? A. Yes,
sir.

Q. And handled in the same way ? A, Yes, sir ; in the same
sort of can.

Q. Does it require any more care in shipment than the
others? A. I think not, except in extreme hot weather it
needs ice, and then the shipper of the cream places ice in the
car liimself to protect it.

Q. They don't furnish any refrigerator cars for that purpose?
A. Nothing different from a milk car.

Q. Now, tell us what sort of a car this milk car is ? A. I
cannot tell you ; all the information I can give you about that is
what Mr. Depew and others have stated before railroad com-
mittees at Albany ; so far as being different, it has a different
kind of spring placed under the car different from the ordinary
freight car.

Q. Is that all the difference? A. There may be other little
differences ; I cannot say ; I won't pretend to testify.

Q. Have you examined into the effect this high tariff on
milk has on the production- of milk in the neighborhood of
New York ? A. Yes, sir.

Q. What is the effect, do you think ? A. It has increased
and stimulated the production of milk near the City limits
very much by keeping up the price of freight during the last
five or six years.

Q. How does the milk produced a,round and about the City
of New York, and in the City of New York and Brooklyn com-
pare with the milk that comes from the country in wholesome-
ness ? A. I should say, swill milk is unhealthy ; milk made
from garbage.

Q. Milk, the production of which has been stimulated is
swill milk ? A. Very much of it ; milk from garbage fed
cows ; even for good milk where cows have been kept in
stables ; very much of the milk is from cows where they
have been kept confined in stables, and of course they don't
get the air.

469

Q. What sort of milk is it that is thus produced ? A. The
Board of Health authorities say it is not very good ; I agree
with the-m, and don't think it is myself.

By Mr. Wadswoeth :

Q. What do you mean exactly by swill milk ? A. That
which is made from distillery swill or waste.

By Mr. Steene :

Q. The producer near the city then receives the difference
between the cost of transportation and the price of the
milk, doesn't he ? A. Yes, sir ; he realizes that much more than
the producer in the country does ; he does not ship it by trans-
portation lines.

Q. Do 3'ou get cheese in milk cans ? A. Pot cheese do you
mean ?

Q. Pot cheese ? A. No, I don't ; there are shippers who do.

Q. Do you know that they are shipped in the same cars —
milk cars ? A. I am told by an employee of the railroad com-
pany, that they are often shipped in the same car ; often
shipped upon what is called the local freight cars of the milk
traiu ; sometimes in the milk car and sometimes not.

Q. Are the cans the same as the others ? A. Yes, sir ; the
same as the milk cans.

Q. How much do they weigh ? A. I should say fully as
much as .a can of milk ; it may be a little more.

Q. What is the charge on that ? A. I am told when it comes
in that milk car it is the same as milk; 40 cents a can now ;
and when it comes in this local freight car attached to the
milk train it is about 25 cents a can.

Q. Does that local freight car bring milk also? A. Ithinknot;
they won't allow that to go in there ; they want 40 cents for
that.

By Mr. Loomis :

Q. How long have you been in the milk business ? A. Be-
tween three and four years.

Q. What business were you in before that? A. I was in
the country in a grocery store.

•470

Q. What is the difference in the value of a can of cream
and a can of milk ? A. Well, the difference is about, I should
say, three or four dollars : I don't handle cream myself.

By the Chairman :

Q. What is the ratio ? A. I think cream is worth usually
about four times as much as milk.

By Mr. Loomis :

Q. Cream is worth three or four times as much as milk ?
A. Yes, sir.

Q. What is the extent of your business in milk? A. The
amount I sell ?

Q. Yes, sir. A. My business is not very large ; I sell three
or four hundred quarts a day some days ; it varies.

Q. Does it average that the year round ? A. Not now ; my
business is divided ; I was in partnership with my brother-in-
law, and we then did a business of seven or eight hundred
quarts a day ; we divided it.

Q. Has your business in milk since you went into it
steadily increased and improved? A. I might say it had; I
should say it has with the retail, not the wholesale ; I have
discarded that. ,

Q. You went into the milk business because you thought
you could do better in it than in the grocery business ? A. I
did, certainly ; because it was a cash business ; I found
grocery business was not.

Q. Do you deal in that kind of milk described here as swill
milk? A. I do not.

Q. Have you ever done so? A. I never have ; I have
tried to prevent other people from using and selling it, too.

Q. On what kind of train does your milk that comes on the
Long Island Railroad come in? A. What kind of a train?
they are milk cars.

Q, What trains are they run on ? A. I don't know ; I
cannot tell ; I think they attach them as far as Jamaica as a
milk train ; there they divide ; one road goes to Williams-
burgh and another to Brooklyn, proper ; and I think the cars
to Brooklyn come by some other train.

471

Q. How do you know the milk comes in what are called
milk cars ? A. Because they have milk on the cats.

Q. How do you know it ? A. I see it.

Q. You have seen the car detached from the train ? A. T
have seen them bring down two or thn'e cars at a time — down
to Flatbush depot from Jamaica.

Q. Your dealings have been exclusively — since you have been
in the business — with Queens and Orange Counties ; is that so ?
A. Yes, sir.

Q. What you knew about the business, as done upon the
Hudson Kiver Road, and Harlem E.oad, and the New Haven
Road, is derived from your investigations on the subject ? A.
Yes, sir.

Q. Information you got from parties here and there? A.
Yes, sir ; I tried to get it pretty correct ; I have been up on the
Harlem Eoad, and investigated it a little.

Q. The information that you give to the Committee is
second-handed in that respect? A. I don't know who can
give it first handed.

Q. What price did you pay the producer of milk in Orange
County last year in the month of May ? A. Two cents a
quart.

Q. What price did you pay in the month of April ? A. I
think 2J, I am not sure ; T think so.

Q. Don't you know ? A. I don't know, I can find out ; I
think 2^.

Q. What price did you pay last year in the month of -June ?
A. Two cents.

Q. That is the same price you pay this year ? A. Yes, sir ;
we agreed to pay that this year for five months.

Q. Then the farmer in Orange County don't get any more
for his milk this year when the rate has been reduced, than he
got last year ? A. No ; he expected to get one-half a cent less.

Q. Why? A. Because everything else was less.

Q. Generid reduction? A. Butter is less.

Q. There is a general reduction on all commodities ? A.
Yes, sir.

Q. What did you charge the consumer of milk last year in
the month of May ? A. All the way from four to eight cents.

Q. What did you charge the consumer this year in the
month of May ? A. From four to eight cents,

472

Q. The consumer pays as much this year as lie did last year
since the reduction ? A. Yes, sir.

Q. What is the difference in the price from four to eight
cents; ■« hat is the basis of it? A. Some is based upon the
quantity that is u^ed, and others is based upon how hard they
bear on for a cheaper price.

By the Chaibman :

Q. For special rates ? A. Special rates ; we have cut rates
and special rates too.

By Mr. Loomis :

Q. Is there any difference in. the quality of the milk you
sell? A. I don't thinlj there is ; there may be a little differ-
ence between Orange County and Queens County; some have
a notion that they like one better than the other.

Q. Do you charge a little more for milk that has no water
in it than milk that has ? A. I don't know anything about
water in milk ; I don't handle water in my milk ; there are a
good many in New York and Brooklyn, that don't handle it
whom you would like to make out do.

Q. I don't want to cast any slur upon your trade ? A. I
know you don't ; Mr. Depew does, though, if you don't ; he
represents your road.

Q I don't suppose you ought to select Mr. Depew as a tar-
get for your abuse? A. He makes me his target, sometimes.

Q. Then the only way in which the producer of milk has all
the benefit of this reduction is in the failure of his expectation
that he would have to sell it a little cheaper this year than he'
did last? A. Yes, sir.

Q. It has not put any money in his pocket ? A. No; and
has not taken out as much ; if you will allow me to say that
there is a committee of farmers from Orange County who
come down to New York, and with the committee from Brook-
lyn and New York dealers make the market price for milk ;
that has been done since a year ago last April.

Q. You fix a rate for it ? A. We fix a rate for it ; previous
to last year they had nothing to say— the producers; the dealer
supplying the demands regulated the quantity and price.

473

Q. That prevents the consumer from getting the benefit of
any competition ? A. I don't see how it does.

By Mr. Shipman :

Q. One farmer is not allowed to undersell the rest ? A.
He don't ; he can give it away if he chooses ; this isnotpool-
ing; this is not a pooling arrangement, only the farmer felt he
would like to have a voice in saying how much he should re-
ceive for his milk, and quite a number of respectable milkmen
thought so too, and so they met and agreed together ; that
Committee met in the middle of May, and made a price for
five months, and they have stated they felt perfectly satisfied
and said they thought they had received the entire reduction
of the freiglit themselves.

Q. That is not the point I want ? A. Probably you did not ;
I wanted to make that point myself.

By Mr. LooMis :

Q. A farmer, not belonging to this association, his milk
would be apt to sour in the hands of his consignee ? A. I
don't see how.

Q. He could not sell it ? A. He has already sold it.

Q. I mean a man outside of the association you speak of,
who combined and conspired to fix rates ? A. There is no com-
bining or conspiring to fix rates ; these parties sell milk to
each individual dealer in milk, before they come down here ;
they simply come down here to make a market price for the
milk they sell ; heretofore they had sold it, but they did not
know wbat they were going to realize on it.

Q. Then the dealers are bound by contract which they make
with this association of farmers ; if a farmer, not belonging to
this association, should send milk here, he could not find a
customer for it ? A. Why not — he has his customer ; this as-
sociation don't provide customers.

Q. You belong to the association, and you get your supply
from the association at fixed rates ? A. No, sir ; don't agree
to get any supply from any association ; I get it from my
individual farmer the same as any other dealer does ; the
association don't fill the supply for the demand at all.

Q. Has it occurred within your knowledge that milk has
48

474

been bought by the distributor here at a less price than this
association has fixed the rates ? A. Yes, sir.

Q. How many times ? A. When it is plenty it is set on the
platform and then thrown away, and no demand for it, and no
man wants it.

Q. That is where a man goes skirmishing through the
country (o find it on the platform, that they don't want it ? A.
There may be a platform at Jersey City and a platform at
Harlem.

Q. The producer of milk gets nothing for it ? A. He sends
it to market.

Q. He gets comparatively nothing ? A. Sometimes he does
not get anything, if he has not a customer for it.

Q. What is the reason for that ? A. I suppose because he
has not a customer for it ; nobody wants it ; I take what my
farmer ships me ; I don't want any other farmer's milk ; I
would not know what to do with it.

Q. Then, it follows, the trade being bound by those ar-
rangements— A. (Interrupting.) There is no binding about
this arrangement at all.

0. Being committed by these dealers, who fix the rate by
this association ; he has no customer for his milk when he
brings it ? A. No, sir ; it is not arranged that way at all ;
yon have got on the wrong construction of the thing al-
together.

Q. I want to understand your evidence ; I wish you would
explain it ? A. The farmer has already sold his milk ; twenty
farmers in Orange County have sold their milk to twenty deal-
ers in New York ; simply, a committee from those twenty far-
mers meet a committee of twenty dealers, and arrange what
the prices shall be that'is to be paid between dealer and far-
mer, on the basis of the market price ; a great many of the
farmers sell it on a fixed price ; they make a price with this
dealer.

By the Chaieman :

Q. Do you take the freight out of this two cents a quart ?
A. We pay the freight.

Q. Two cents a quart in addition to it? A. Certainly, we
pay two cents a quart, and a cent and a half in addition.

475

By Mr. LooMis :

Q. Suppose the twenty-first farmer was not in this agree-
ment to fixthe rate, when he woulil send milk here, would he
get rid of it and at what price ? A. The same as be would get
rid of it if there was not any association; if he sent it to a man
that was taking it all the time of him, that man would take it,
and if he sent it to a speculator that speculator would l:o on the
market and try to sell it ; if he hadn't a customer he would not
sell it to anybody ; this organization was simply to give the
producer a voice in making a price for his commodity ; pre-
vious to last spring the market price was made without regard
to the farmer at all.

Q. Previous to that the farmer had to take what a dealer
would give him for it ? A. Whatever the market price was ;
somebody made it, and nobody knew who — neither the small
dealer nor the average dealer knew, and the farmer did not
know, and they thought it best somebody should know.

By Mr. Shipman :

Q. Ton spoke of shortage in milk— occasional shortage in
cans ? A. Yes, sir.

Q, Do jou measure the milk when put into the cans, or
does your agent, when it is put in the cans ? A. No, the farmer
is supposed to fill the can.

Q. The railroad company has no means of knowing how
much there is in the can ? A. Why, yes, if they take the lid
off and look in.

Q. In order to determine if there was a quart short, they
would have to measure it ? A. No, they have a rod to show
it ; a rod tells that ; we have a rod.

By Mr. Steene :

Q. Are the cans of uniform size ? A. Yes, sir ; on the Erie
Eoad they are ; on the Long Island Road, with some excep-
tions ; there are thirty and fifty quart cans as well as forty,
but mostly forty.

By Mr. Shipman :

Q. Has the Erie Railroad offered to pay shortage on cans
if you would seal the cans ? A. I am told they say they will

476

if we seal the cans ; my milk that came was wired, and I have
had milk come short that had been wired ; I have received it
with a chain and lock on, and the chain and lock broken and
the milk short ; I will say an agent from Montgomery Station
said that the cans were full when they left there, and after I
received them they were not full.

Q. Have you made a complaint to the company? A. I made
a complaint to the President of the Erie and Brooklyn Annex.

Q. I say the Erie Kailroad? A. Well, it comes over his route
to Brooklyn.

Q. I am asking you now if you made complaints to the Erie
Kailroad Company ? A. I made complaints to Mr. Decker,
the agent, who carts my milk, and who is an agent of the Erie
Railway.

Q. Have you ever made any claim for loss ? A. I have made
claims for loss.

Q. Of whom ? A. I made claim for loss, and I got it on that
can that was spilled.

Q. There was no complaint on that then ? A. I have not
made any figures of loss by shortage.

Q. You speak of the loss of time of the trains in getting in ;
can you name any particular time, or state the number of
times ? A. Oh, it occurs a great many times in the course of
a year.

Q. Do you know whether or not the railroad company make
all other trains give way to milk trains ? A. I have heard they
say so, but I never believed it ; I never heard of a passenger
train being switched off to let a milk train go by ; there are
passenger cars attached to the milk train, and I suppose that
is the reason why it should have the right of way.

Q. Do you deal in cream ? A. Yes, sir, I do ; not directly,
I get it of another dealer in cream.

Q. What does cream cost here ; what is the price of it de-
livered here in New York ? A. By the can ?

Q. What do you pay the farmer for cream ? A. I do not
get it of the farmer.

Q. What does your jobber ? A. It comes from a creamery ;
the farmer does not send it ; the creamerman sends it.

Q. What does it cost ? A. I think he receives five dollars
a can.

477

Q. Do you know how many quarts are in a can ? A. Forty
quarts to the can ; supply and demand regulates it.

Q. What do you get for it ? A. I do not buy it in that way.

Q. What do you get it for ? A. I know what you want ;
you want to make a price between that and what I get for it.

Q. What do you get for it ? A. I get twenty cents a quart ;
I pay sixteen.

Q. Do you know whether the milk cans and cream cans
weigh the same ? A. I don't, but I think there is not much
difference.

Q. Do you know whether the railroad company furnishes
any ice to protect the cream, or not ? A. I tried to find out,
and I am told they do not, by a man that ought to know ; on
the Erie road they have never furnished a pound of ice, but the
cream men in every instance furnish it at their own expense.

Q. That you don't know ? A. That I have tried to find out,
and think it is straight.

Q. How is it with regard to the milk and cream business in
the country and over the roads ; has it increased during the
last five years ? A. I can say on somejroads, I think not ; for
instance, the Harlem that used to carry four thousand cans a
night, is reduced down to twenty-five hundred ; by reason of this
high freight, many of the dairymen had to go out of the milk
business.

Q. Won't you answer my question ; the question is whether
the milk trade of the City of New York with the country had
fallen off or increased ; you say it has fallen off on the Harlem
road? A. Yes, sir.

Q. Has it increased or fallen off on the other roads — the
Erie and New York Central and Long Island ? A. I cannot
tell ; I don't know.

Q. Your answer would be the same about the cream busi-
ness ? A. The cream business has increased, I think ; they
are using more cream all the while.

Q. This swill milk business is a bad business all around ?
A. I think it is.

Q. It injures the patients and injures your business ? A.
Yes, sir ; I think so.

Q. Have you ever made any efforts in your association to
get laws to suppress it ? A. We have made an effort through
the Board of Health to suppress it ; we have had inspectors

478

appointed who inquired as to what they were selling ; we have
done all we could to Lelp exterminate the business, and I think
we have done some, good.

Q. How '? By finding out and reporting to the Board of
Healtb.

Q. There is not then so much swill milk as formerly ? A.
Not as much as there was six months ago.

Q. The local production then has decreased ? A. Yes, sir ; it
has increased the quantity of milk brought over the Erie road
by reason of it.

Q. Now, won't you tell me, if you can, about what propor-
tion of milk sold by the dealers and- consumed in New York
comes from the country and about what is produced in the
city and its immediate vicinity — the proportion? A. I don't
know as I could say.

Q. Does nine-tenths of it come from the country ? A. No,
sir ; not as much as that.

Q. Seven-eighths of it about? A. I should think three-
fourths of it.

Q. Of course that is only a matter of guess ; there is an in-
stitution called the Kings County Milk Exchange? A. There
is.

Q. That is the institution you represent ? A. I represent
that.

Q. What is that? A. It is an organization of milk dealers
who organized themselves together for the purpose of suppress-
ing the sale of impure milk, of adulterated milk, skim milk, or
swill milk, and at the same time they d:) all in their power to
reduce the exorbitant prices paid as freight on milk.

Q. It has something to do with fixing the rates ? A. No,
sir ; rates for what do you mean ?

Q. For milk — the price ? A. The price it sells at ?

Q. You don't undersell one another, do you? A. No, sir;
we don't ; we agree not to take another member's customer at
a less price than that man pays ; we are honorable amongst
each other ; that is what we are, you understand.

Q. Your association meet the committee of the farmers, and
you agree upon certain rates for milk with them ? A. Yes,
sir.

Q. You require the community if they deal with you to pay
those rates ; you don't cut rates after you have fixed them ?

479

A. We agree that the rate that we pay for the milk to the
fanners

The Chairman (Interrupting) — Answer the Judge's question
directly, lie is entitled to that answer, as he asks the ques-
tion.

Q. I will put the question again ; in the first place, your
association and the committee of farmers fix the rate at which
you are to pay the farmers ? A. Yes, sir.

Q. Do you also fix the raie at which you are to sell to the
public ? A. Oh, no.

Q. The farmer doesn't have anything to do with that? A.
No, sir.

Q. Who does fix that ? A. Almost every dealer fixes that
himself.

Q. Do you mean to say the association allows one dealer
to sell for five cents, another dealer to sell for six cents, with-
out regard to the quality of the milk? A. Yes, sir.

Q. There is question raised on that ? A. Yes, sir, there is
something fixed ; as I said, one dealer is supposed not to sell
at a less price to another member's customer, than that member
is receiving at the same time.

Q. I want to know if you fix the rate, or who fixes it ? A.
They have agreed upon a rate at different times in the as-
sociation ; it was ten cents a quart and they agreed to reduce
it down to eight.

Q. You stick to it, of course ? A. I can't say that we do.

Q. Will you produce a copy of the organization of the Milk
Association ? A. I don't know whether I can or not.

Q. You are the Secretary, are you not ? A. No ; I happen
to be Vice-President at present.

By Mr. Steene :

Q. You must have a copy of that ? A. There is a copy of
the by-laws under consideration ; they have not been adopted
yet.

By Mr. Shipman :

Q. The organization under which you are acting now? A.
I can bring you a copy of the original formation of the
organization.

480

Q. Let us have that ? A. Yes, sir.

Q. And the by-laws, whatever you have, that shows the
character of your organization? A. Yes, sir.

Q. Because raihoad men may come to some understanding
with you? A. It has all been published in the Brooklyn
papers; we have no hesitation in showing that.

Q. I want to ask you one more question : Suppose the
committee of farmers and the Milk Association cannot agree
as to the price which the farmers shall be paid for their milk ;
how do you settle that difficulty ? A . It is not settled then.

Q. "What do you do in that case ? A. Either every man
goes on his own hook, or else the price gets made over at the
Erie Railroad depot, some how or other ; I don't know who
makes it.

Q. In a difficulty of this kind, doesn't the Milk Association
settle it ? A. No, sir.

Q. They have the power to bring the farmers to terms ? A.
No ; the farmer has an association as well.

Q. They, have one ? A. Yes, sir ; they have five hundred
producers of milk in Orange County forming their associa-
tion.

Q. "What do they do with regard to the milk traffic ? A.
They simply form this committee; they appoint a committee
to go to Albany to look after the legislation ; they appoint
committees for several purposes.

Q. They have their conferences and you yours, and the two
committees meet together and have their conference ? A. Yes,
sir.

Q. And between you you fix the price of milk and get the
transportation as cheap as you can, and make all you can on
it ? A. You are right ; we do.

Q. In other words, you get whatever price your milk will
bear ? A. Whatever price the consumer will bear to pay.

By Mr. LooMis :

Q. Is your association represented by counsel before this
Committee? A. By counsel? I guess not ; I am looking after
their interests as much as possible, and I don't claim to be
any counsel ; at least I do not receive any pay for it.

Q. Is it represented by other counsel present before this
Committee ? A. I don't know, except Mr. Sterne looks after

481

the general interest of the community, and we look to him to
look after our interests also.

By the Chaieman :

Q. Have you retained anybody to appear before this Com-
mittee ? A. No, sir.

Adjourned to 10 A. M., June 20, 1879.

New York, June 20, 1879.
The Committee met pursuant to adjournment.

Present— All the members except Mr. Gbady.

Mr. DuGUiD, Chairman of the Sub-Committee appointed to
examine the books of the New York Central and Hudson
Eiyer Eailroad Company, containing special rates, presented
the report of that committee.

Albert Fink, sworn.

Examined by Mr. Sterne :

Q. You are the Commissioner named by the various trunk
lines, in relation to their pooling arrangements, are you not ?
A. If you call them " pooling" arrangements, yes ; but I some-
what object to the name.

Q. What, technically, is the position you hold? A. This
" pooling," I think, as it is applied, is a misnomer of the ar-
rangement as it now exists ; the name gives rise "^o a great many
misunderstandings ; the public generally expect, under the word
" pooling," some gambling transaction, and they judge of it in
that light ; and I have seen some of the very best papers in
New York base an argument upon the great objections to
" pooling," on the supposition that " pooling " is used in the
sense to which it is usually applied to gambling operations.

Q. My question was: what is your position? A. I have
here the contract between the four lines which you asked me
to pfodnce, which will show exactly the nature of the opera-
tions.

482

Q. "What position do you hold in relation to the arrange-
ment between the trunk lines ? A. I am to carry out the con
tracts between the trunk lines, of which I have a copy here.

Q. You are the Commissioner named by them ? A. That is
my oflScial title.

Q. Commissioner of what ? A. Of the four trunk lines.

Q. These trunk lines are the Baltimore & Ohio,^ the Penn-
sylvania, the Erie, the Hudson Eiver & New York Central
Koad? A. Yes, sir.

Q. Are there any others that belong now that did not there-
tofore belong to the arrangement? A. There is all the western
roads — a great many of them at least — in the territory between
the Mississippi and the Ohio river and the Atlantic that be-
long to the association which you might say are co-operating
with each other in all matters relating to the competitive
traffic, of which they form the Executive Committee, of which
I am the chairman ; that is a separate organization, in which
the western roads are connected with the trunk lines ; there
are two organizations in which the trunk lines are concerned —
one between these four roads and another one of which they
are parties only with the other western road?.

Q. Since when have you held that position ? A. Since June,
1877, as between the trunk lines, and since December 19th,
last, as between the combined trunk lines and the western
roads.

Q. Then that second arrangement grew out of the first ? A.
Yes, sir ; it is an extension of the first, you might say.

Q. And embraces the western lines as far west as the
Mississippi river ? A. Yes, sir.

Q. And as far south as what? A. The Ohio, and embraces
one line beyond the Ohio ; the Louisville & Nashville Rail-
road.

Q. You were President of the Louisville & Nashvile Kail-
road, were you not ? A. Vice-President.

Q. How long were you Vice-President of the Louisville &
Nashville Railroad ? A. I was connected with the Louisville
& Nashville Eoad some eighteen years ; but, as Vice-Presi-
dent, perhaps five or six years ; I don't remember.

Q, Had you that position as Vice-President of the Louis-
ville & Nashville Railroad just anterior to your coming here ?
A. No, sir ; I resigned that position in 1875.

483

Q. And took the position as Commissioner of some southern
organization ? A. Yes, sir ; for some six months ; simply for
the purpose of organizing a simihir association.

Q. That was the origin of an association similar to the one
that now exists as to the trunk lines from New York 1 A. Yes,
sir.

Q. And you organized that ? A. Yes, sir.

Q. And that was called what ? A. The Southern Eailway
Association — the Railway and Steamship Association.

Q. Thut comprises how man^- lines ? A. About twenty-
five railroads.

Q. You were Chairman of the Executive Committee ? A. I
was called Commissioner or Chairman of the committees.

Q. Yon say you brought copies of the contracts — the so-
called pooling contracts ? A. Yes, sir.

Q. AVill you produce them, please (witness produced con-
tracts) ? A. This is the contract under which the present ar-
rangement is being carried out.

Q. Is that a copy ? A. No, this is my own copy ; I didn't
have time to have a copj' made.

Q. You can have a copy made within twenty-four hours ?
A. Yes, six".

(Contract offered and received in evidence, ami marked " Ex.
No. 1, June 20, 1879." The Chairman read the contract.)

The Witness — I suppose it is one of the objects of the Com-
mittee to have this pooling arrangement tlioronghly understood.

Q. This is a pooling of fi-eights ? A. The whole object
of this contract is that it is an agreement between these four
lines to carry each a proportion of the whole traffic carried by
these companies.

Q. That is the agreement as to the division of the freights ;
a modification has been made as to that? A. No modifica-
tion.

Q. Yes, the Erie gets less? A. It is a modification of the
division of the traffic, but that is unimportant.

Q. Is there an agreement which modifies this ? A. It don't
modify the agreement, except each road gets a different per-
centage ; that is all.

Q. What are the present percentages ? A. They are in dif-

484

ferent classes, and I cannot name the various classes ; 35 per
cent, to the New York Central; 31| to the Erie; 25 to the
Pennsylvania, and 9 to the Baltimore & Ohio.

Q. That is on freight from New York? A. From New
York.

Q. Now, there are pooling arrangements of freights from
Philadelphia, and of freights from Baltimore ? A. There are
similar arrangements with those from Baltimore, Philadelphia,
and Boston.

Q. The percentage differing, however ? A. Yes,, sir.

Q. Have you those contracts here? A. They are no con-
tracts ; they are simply percentages.

Q. Isn't there some written evidence of these percentages ?
A. The nature of the- contract is the same; I do not suppose
the percentages make any difference.

Q. Yey ; because it may be of interest to know how far the
New York Central is interested in the Philadelphia, Baltimore
and Boston business ? A. The arrangements in Philadelphia
are not finally agreed upon, but they are temporarily and
aj)proximately agree lapon ; do you wish that now?

Q. Yes ; if you can give the information ? A. You wish the
New York Central proportion ?

Q. The New York lines? A. From Philadelphia it is seven
per cent.

Q. The New York Central? A. Yes, sir; and the New
York, Lake Erie & Western, from Philadelphia twelve per
cent.

Q. Seven per cent, for the whole traffic from Philadelphia ?
A. Yes, sir ; and from Baltimore it does not get any particular
percentage ; they are working over the Pennsylvania lines, but
they have no particular agreement as to percentage as yet, but
they have actually been getting out of Baltimore about one and
a half or two per cent, on the Baltimore traffic.

Q. How as to Boston ? A. I have not got the exact
figuies with me, but I remember it was about sixty-five per
cent, to the New York Central by both, lines — the Fitchburg
and the Boston & Albany Railroad ; I will prepare and put in
evidence a more correct statement ; I am mistaken ; it is only
about fifty-five, I think.

Q. How much does the Erie get from Boston ? A. About
eight per cent., I think.

485

Q. And the Grand Trunk ? A. They get about seveuteen.

Q. What becomes of the other percentages ? A. Six is the
Pennsylvania and five the Baltimore & Ohio ; I don't know
how much that makes, unless I figure it up.

Q. Will you figure it up ? A. That makes sixty- four to the
New York Central, eight to the Erie, and six to the Pennsyl-
vania, and five to the Baltimore & Ohio, and seventeen to the
Grand Trunk from Boston ; as I said before, these agreements
are only nearly correct ; the final agreement has not been
made, although the division of the traffic between these cities
is in existence since the first of March upon some basis that
is to be finally agreed upon ; but this is the temporary basis.

Q. This temporary basis is with a view of final arr.mgement?
A. Tes, sir.

Q. So as to be consummated in an agreement similar to the
one you have produced as to the New York freights ? A. Yes,
sir ; exactly the same agreement exists under that agreement,
although the precise percentages ai'e not yet fixed.

Q. Iq addition to this agreement there is one with reference
to the rate of charges to be made on westbound freight from
the various cities that is not embraced in the agreement ? A.
There is a contract between the trunk lines in regard to the
difierence in the rates.

Q. Have you a copy of that contract ? A. I have.

Q. Let us have it, please.

(Witness produced contract, dated April 5th, 1877, between
the four trunk lines regulating freight from and to seaboard
cities ; received in evidence and iharked Ex. No. 2, June 20,
1879.)

Q. That is the existing one ? A. That is the contract in
existence.

(The Chairman read the contract.)

Q. Now, what other agreements are there in relation to the
rates between those trunk lines, either affecting the commerce
of New York, or aff'ectiug the commerce of any of the other
seaboard cities? A. There are regular tariffs toade by agree-
ment between the trunk lines from time to time, with these
differences to the other cities as agreed upon here.

Q. Eecognizing those differences ? A. Yes, sir.

486

Q. Is tliere any agreement of a similar character in relation
to the business from Boston westbound ? A. It provides for
Boston; this contract fixes the difference ; the rates westbound
from Boston are the same as from New York.

The Chairman — The provision was that it should be no less
than from New York.

The Witness — It should be no less ; eastbound they are five
cents higher, according to this contract.

Q. Eastbound tbey are five cents higher, wlien they are five
cents higher ? A. The tariff is five cents higher ; whether the
rates charged are five cents higher is a difl'erent question.

Q. There is an arrangtnent now being perfected which will
result as to eastbound traffic in an agreement of a similar im-
port as the one last read? A. Yes, sir ; that is the object of
the agreement.

Q. And also another agreement making the relative per-
centages of eastbound traffic ? A. Yes, sir.

Q. Of the division of the traffic itself? A. The division of
the traffic; the same principle is to be applied to the east that
is now applied to the west.

Q. Upon what basis is the division of the percentages
made? A, As near as possible, upon the 'actual amount of
traffic that would be carried by these roads, if there was a
similar agreement to maintain rates and nobody was cutting
and slashing about.

Q. Then, some information is furnished you, is there not,
upon the basis of which you determine these percentages ? A.
There has been, at the time this original contract was made I
believe no information existed ; but, since that time statistics
have been kept in my office as to the amount of the business
transacted by the roads.

Q. Did the railway companies claim that they could not fur-
nish the statistics upon the basis of which a division could be
made of traffic ? A. They did not furnish them.

Q. They would not ? A. They did not ; what was the rea-
son of course, I don't know ; I was not here at the time, and
I could not say.

Q. You were not here ? A. No, sir ; when this contract was
made I was not here — the original contract.

Q. A modification was made by which the Erie obtains less ;

487

upon what basis did the Erie consent to that or the other cor-
porations ? A. They did^not consent at all.

Q. It was imposed upon them ? A. It was left to arbitra-
tion.

Q. What had the arbitrators to guide them in making that
decision? A. He has all the facts that bear upon the rela-
tive amount of business carried by the roads.

Mr. LoOMis — You were the arbitrator to whom that subject
was left ?

The Witness — Yes, sir ; I was the arbitrator.

Q. In making your determination you had the data ? A. 1
had certain data ; since I came here I had certain data col-
lected.

Q. Did that include the local traflSc of the roads ? A. No,
sir.

Q. I mean the data which was furnished you? A. No, sir ;
simply the traffic to determine the trunk lines and beyond.

Q. The traffic to Buffalo, for instance ? A. That is in-
cluded.

Q. And to the Erie ? A. Yes, sir ; that was included in the
information.

Q. But local traffic was not? A. No, sir.

Q. You recommended this arrangement to them, did you
not ? A. No, I did not ; when the original arrangement was
made I had nothing at all to do with it, but came in after
they had made this contract.

Q. It was based, was it not, upon the model of the organiza-
tion of which you were the Commissioner ? A. There was no
organization at all about it, at that time : the organization was
made afterwards, the present organization ; there was simply
this contract.

Q. When you speak of this contract, as we have two before
us, which do you mean ? A. I mean the contract first read^
as regards the division of traffic.

Q. That left them still free to charge what they pleased to
the various terminal poinls, did it not? A. Not to the ter-
minal points ; the agreed rates were maintained to the terminal
points.

Q. That left them still free, the first contract, as to the divi-
sion of the traffic, to charge what they saw fit as to the term,
inal points, did it not ? A. No, sir.

488

Q. The first contract did not contain any limitation as to the
charge from Philadelphia, Baltimore or Boston, as compared
with New York ? A. Allow me to read the headmg of this con-
tract : " For the purpose of maintaining reasonable and uniform
rates of freight to all shippers, and of preventing unnecessary
and injurious competition ;" that was the object of the con-
tract, of course, it contemplated the maintaining of rates. _

Q. Was there any agreement as to the rates ? A. There is
always an agreement as to rates ; a tariff was established at
that time.

Q. And that tariff, then established, recognized rates that
are contained in that second agreement ? A. Yes ; always.

Q. Were the rates the same? A. The second agreement
only covers the difference in rates, not the rates themselves.

Q. The second agreement states that whatever the rates
may be, that there shall be a difference of a certain percentage
in favor of Baltimore and Philadelphia ; and that tiiere shall
be no difference between Boston and New York ? A. It shall
not be less at Boston than New York, it may be more.

Q. But, practically, it is the same ? A. It is the same on
westbound ; it is more on eastbound.

Q. It has been the same on westbound? A. Yes, sir.

Q. Ever since the existence of this agreement ? A. Yes,
sir ; and before.

Q. Those differences, did they exist before the agreement
came into existence? A. The differences weie gre^iter before
this agreement existed ; this agreement modified the former
existing differences in favor of New York.

Q. Under the old agreement there was a great deal of cut-
ting of rates of all sorts, wasn't there ? A. Yes, sir.

Q. That is to say the tariff was no guide ? A. At various
points there was no tariff, at others there was an effort to
maintain a tariff.

Q. But it broke down in a short time? A. It didn't last
long.

Q. Therefore whatever agreement they had before this — for
want of a better word we will call it the pooling arrangement,
the various trunk lines could not maintain rates by simple
agreement between themselves ? A. No ; I believe not ; it has
never been done by any lines — very few, if any.

Q. Scarcely had the agreement been made before some cut-

489

ting took place, and then the agreement was off? A. That
was generally the case.

Q. That cutting was always started by some secret rebate,
or drawback, or undervveighing, or some process known to
railroad men, by which a nominal tariff was maintained, and
a secret rate given, wasn't it? A. Generally, not always.

Q. That was one of the methods? A. Yes, sir.

Q. And the methods that I have named are those methods;
billing the goods at one rate and giving a drawback is one
method of cutting ? A. Yes, sir.

Q. Paying a rebate is another method ? A. Yes, sir.

Q. Underweighing the goods is a third method ? A. Yes,
sir ; cheating the railroad companies, as you may call it.

Q. Cheating themselves ? A. Cheating and being cheated.

Q. And the public had no certainty of knowledge as to what
any given rate was for a particular given time? A. They
could never be sure of what rate under this system of compe-
tition— what rate his neighbor would receive.

Q. You don't mean under the system of competition, but
under the old system of agi'eement? A. There was always
agreement to maintain rates, but they were not kept, because
the different lines were trying to get, one from the other, busi-
ness away.

Q. One of the objects, as I understand it, of making this ar-
rangement— this close alliance between the railways, which is
called " pooling," — was to maintain rates? A. To maintain
rates and to stop this given discrimination which you speak
of.

Q. One of the objects was to maintain them ? A. One of
the objects was to maintain the tariff rates.

Q. And that was to prevent the cutting, which cutting re-
sulted in reduction from tariff rates ? A. Y'es, sir.

Q. Another one of the objects was to maintain stability of
rates? A. Yes, sir; that follows from the maintenance of
tariffs, of course.

Q. Certainty of rates ? A. Yes, sir.

Q. And the same rates to all the public ? A. Yes, sir.

Q. You consider these desirable objects ? A. Very, indeed.

Q. You want a stability of rates and the same rates to every-
body? A. Yes, sir; everybody desires them; both the rail-
road companies and the public.
50

490

Q. And you think the public is best subserved by such a
system ? A. Yes, sir.

Q. You also believe, do you not, that even a high rate is not
so dangerous or demoralizing to a business community — high
tariii^ — as an uncertain and fluctuating tarifl"? A. I think a
reasonably high rate is better than an extremely low and fluc-
tuating rate.

Q. That is to say, stabihty of the rate, and a certainty of the
rate, is of more importance than the actual amount of rate ?
A. Yes, sir.

Q. You think that is the best, as a matter of railway econ-
omy? A. Yes, sir; merchants prefer them to a fluctuating
and discriminating rate ; they do not care what rates they pay
within reasonable limits ; so the rates are fixed and not dis-
criminating.

Q. 80 they may know what the rate is ? A. Yes, sir.

Q. So they can base their shipments and their future
transactions upon certainty of knowledge as to a rate? A.
Yes, sir; that is the whole object of our railroad policy.

Q. You also think, as part of railway economy, and it is
upon that ground that you defend this pooling arrangement ?
A. It is not upon that ground alone.

Q. That is one of the grounds ; one of the grounds that the
rates should be public ? A. Yes, sir, I think that is desirable ;
should be same to all parties.

Q. That is another desirable part of railway administration,
both for the railways and for the public ? A. I think so.

Q. And that, as a business man, you would say, on the ground
that a man shall know how much of the element of the cost of
the goods that he proposes to transport is embraced in the
freight charge? A. Yes, sir.

Q. Now, you also think, do you not, that another good ele-
ment of railway economy, is the equalization of rates to people
at the same locality ? A. You mean the same rates to people
of the same locality ?

Q. Yes ; from the same point ? A. I believe that is one of
the objects.

Q. That is a desirable object ? A. Yes, sir, to avoid dis-
crimination.

Q. And you believe that discriminations are injurious and
improper? A. All unjust discriminations.

491

Q. That a discrimination tiiat gives to A a rebate on the same
class of goods that B sent to the same place and from the
same place, is an unjust discrimination, if A and B ship any-
thing alike in amoiants ? A. If they are in all conditions alike
and the rates are ditferent, then it is an unjust discriminaDion ;
in order to determine what is a just and unjust discrimination,
you have to take into consideration all the conditions under
which the shipments were made.

Q. You were examined by Mr. Nimmo, who was then the
Chief of the Division of Internal Commerce in the United
States Treasury, as an expert, were you not ? A. Yes, sir.

Q. And you returned to him certain answers to certain ques-
tions that were put to you in 1877 ? A. 1875 and '6.

Q. And those are published in the '"First Annual Report of
the Internal Commerce of the United States ;" you have seen
that ? A. Yes, sir.

Q. Those answers, as published, you have read, have you
not ? A. Yes, sir.

Q. And they are correctly given ? A. Yes, sir.

Q. Now, question 6, that Mr. Nimmo put to you, was:' Please
to state your views as to the propriety of the policy of a road
entering into special contracts with parties proposing to erect
large manufacturing establishments on the line of their roads,
to carry freights at less rates than for the public generally, the
object being to wait for profits likely to arise from the general
devel opment of business, in consequence of the erection of such
works ?" To which you returned this answer : " I do not think
that a common carrier has the legal right to enter into special
contract with manufacturing establishments to carry freight
at less rate than for the public generally, for the purpose of
encouraging the erection ol such establishments on the line of
its road ; it is not the province of railroad companies to make
themselves partners in private enterprises ; even if they have
the legal right, it is questionable whether it would be good
policy for them to do so." Would that be your answer to-day
to that same question ? A. Yes, sir ; it is proper for me to say
that nobody agrees with me ; I simply hold that opinion, but it
is an opiuion that very few railroad men agree with me in.

Q. That is because you have larger view^s than other rail-
road men ? A' No ; I might have more radical views ; I am a

492

strict costructionist ; there are a great many reasons that may
be said upon the other side.

Q. You have weighed those reasons before you gave those
answers ? A. Yes, sir ; I have weighed them since ; because
it has brought me in contact with a great many other railroad
men that discussed the question witli me since.

Q. You are a railway engineer, too, are you not ? A. That
is my profession.

Q. Originally ? A. Yes, sir.

Q. You understand the building of railwaj's as well as the
management of railways ? A. Yes, sir ; I was brought up as
a constructor of railways and manager.

Q. There was another question put to you, and you further
proceeded to say : " The same articles of freight should be
carried at the same rates between the same points ; if coal is
carried from A to B for a blast furnace at B, at a certain rate,
it should be carried for the same rate for a party at B, who
consumes it in mannfacturiuf;; flour ; both parties benefit
the railroads ; but it is impossible to draw a line of distinction
and to grant privileges on account of the degree to which rail-
road companies may be benefited by different shipments ; such
policy would lead to many complications and unjust discrimina-
tions ; nor do I think it is right that common carriers should
make special contracts on account of the quantity shipped, ex-
cept when quantity forms an element in the cost of the trans-
portation service, and this is only the case when the quantities
are less than carloads ;" that is still your view, is it not ? A.
Yes, sir ; the principle is the correct principle.

Q. Let me ask you one other question ? A. Allow me to
qualify it —

Q. No ; answer my question first.

Mr. LooMis — I submit that the witness should not be inter-
rupted in his answer.

The Chairman — It is proper, in the examination of the wit-
ness, to require the witness to answer the question that is
asked ; then, when the answer is completed, he may be al-
lowed to give his explanation.

Mr. LooMis — It seemed to me that the witness had some-
thing more to say in his answer to the question put.

The Chaieman — The witness will have an opportunity to

493

make all the explanation he desires ; Mr. Sterue will have an
opportunity to complete his question.

Q. You further go on to say, "It does not cost more to carry
ten car loads of freight between two stations, A and B, for one
shipper than it costs to carry one car load for each of ten
shippers ; the railroad company derives as much benefit from
ten small manufacturing establishments as from one large one
of the capacity of ten smaller ones ; if the railroad company
grants to the larger establishments lower rates of transporta-
tion, it would unjustly discriminate against parties with
limited means, and be of no benefit to the railroad company ;
a common carrier should strictly adhere to the rule to charge
the same rate for transportation for the same articles between
the same points, only discriminating on account of quantity, as
far as it influences the cost of transportation ; he should not
make any arbitrary distinction merely depending upon his will."
Is this, which I have now read as your answer to the sixth
question put to you by Mr. Nimmo, still your view in relation
to railway administration ? A. That is the correct principle
on which the tariff should be constructed ; but, of course, it
is one thing to announce a correct principle and another to
carry it out ; there are certain difficulties in the way of carry-
ing out this principle at present ; there are other reasons, and
it becomes, in many cases, a matter of policy with railway
companies perhaps to come to different conclusions without
really causing unjust discrimination ; for example for the en-
couragement of manufactures on the line of railroads, rrost of
the railroad companies of the country seem to make conces-
sions for that purpose.

Q. You misunderstand my question?' A. I wish to get
through my answer.

Q. I do not want to interrupt you, but I am asking you, not
what other people think, or what other people do, but I am
asking your views.

Mr. LooMis — You read a long answer and the witness is
trying to explain it.

The Witness — I will give you my views ; since I wrote that
I have discussed the question with a great many railroad men,
and have gained additional information, and I want to give
you the benefit of that as well as my own knowledge and
experience ; I can conceive a great many cases where

494

the railroad companies may make concessions to manufactur-
ing establishments on the line of the road that would not in-
jure anybody, but would benefit really the people on the line
of the road. I have been very positive in laying down these
general principles, because I think every vioalation of a princi-
ple generally leads to further complications, and it is difficult
to draw the line. But these are railroad problems that have
never been completely solved — to what extent concessions could
be made that are not unjust discriminations to anybody — al-
though they are not securing the same rates to all parties at the
same points. To exemplify my views, suppose a blast furnace,
as I have mentioned in that instance, is erected upon the Erie
Eailway, they have a large amount of coal to carry; they
carry from the blast furnace its products ; the people
living in the vicinity find a market for their productions
it increases the population ; and in a case of that kind, if the
railroad company would carry their coal at a reduced rate
while they charged to the private consumer at the same
place a somewhat higher rate, such a rate as before the
establishment of the blast furnace was considered reasonable
and satisfactory, I don't see that anybody would be injured by
the reduction in the rate of coal to the blas.t furnace ; the blast
furnace would be benefited ; the road would be benefited ; the
people living in the vicinity would be benefited ; and there
seems to be no cause of complaint; now that is a question that
presents itself to every railroad manager ; and I believe if Mr.
Sterne was one of those he would hesitate a long time before
he would conclude that he would have nothing to do with the
blast furnace, or any other business man ; yet, as I have said be-
fore, allowing in one case this deviation from a fixed principle, it is
difficult to draw the line ; and that is really the only objection to
these arrangements. I think, in every individual case that you
take up, you have to consider all these facts that I have just
now stated, in order to determine the question whether you
have to do with a case of just or unjust discrimination. If no-
body is hurt by discrimination of that sort, it cannot be called
unjust. If everybody is benefited it certainly cannot be called
unjust. These are complex and difficult quest;ions, that can-
not be answered off-hand, and have a cast iron rule apphedto
them, without considering all the elements that bear upon the
subject.

495

Mr. LooMis — You have stated all you desire to say ?

The Witness— I have.

Q. Let US return to the basis once more ; you say these are
difficult and abstruse questions ; you had considered, had you
not, all the difficulties and abstruseness of these questions,
when you made your answer to Mr. Nimmo ? A. I had con-
sidered them, and have considered them since.

Q. Having allowed you full scope, please answer my ques-
tion ; you have no reason now to deviate from your conviction
as to the correctness of the principle herein laid down ? A. Of
the abstract principle ?

Q. That each particular case of discrimination must justify
itself ? A. You have to consider all the elements.

Q. No ; I do not want an answer that is not responsive to
my question ?

Mr. Looms — When the witness begins his answer I want
to have him complete it.

Mr. Steene — Pay attention to my question, and I think we
will understand each other ; the principle is, as you say, that
there shall be no discrimination ? A. No unjust discrimina-
tion ; the question refers to unjust discrimination.

Q. You say here, that a common carrier has not, as you
think, the legal right to enter into a special contract with man-
ufacturing establishments to carry freights at loss rate than
for the public generally, for the purpose of encouraging the
erection of such establishments on the line of its road ; then,
you think, do you not, or you did at that time, that if a common
carrier does enter into a contract with a manufacturing establish-
ment to carry freight at less rate than for the public generally,
for the purpose of encouraging the erection of such establish-
ment on the line of its road, that that is on its face, unless
justified by peculiar circumstances, an unjust discrimination ?
A. Yes ; on its face ; to carry freight for two shippers at the
same place, at different rates, is, on its face, an unjust dis-
crimination.

Q. Isn't it, on its face, unjust until proved to be just ? A.
You may say it so.

Q. It is a deviation from the general principle which must
be justified in every case ? A. Yes, sir ; all railroad tariffs
are made at the same rate to the same place on the same
articles ; and when a special rate is made, it is generally dif-

496

ferent for some reason that is either justified or is not justified ;
it may be justified.

Q. It may be justifiable ? A. It may be ; although onits face
it is an unjust discrimiuation it may not be an unjust dis-
crimination in reality.

Q. For instance, there are two shippers, at a particular
place, and there are two rates given to those two shippers ;
wouldn't you say that, upon the face of that, that is unjust?
A. Yes, sir ; if the shippers were on the same looting.

Q. Tou would say further that it is conceivable that a rail-
way company may justify that discrimiuation, but they are put
on the defense to show the reason for the discrimination in
every given case ? A. Yes, sir ; to show that it is not unjust.

Q. That is what I want to get out : that, on its face, the dis-
crimination between two shippers is unjust unless justified and
proved to be just according to the principles that you believe
in ? A. The conditions under which the sliipments are made
must be known, to settle that question ; if they are made
under the same condition exactly, it is unjust.

Q. If you know nothing else but this fact — that there are
two dry goods houses iu the City of fSyracuse, and one gets one
rate, and another, another — that, on its face, would appear to
be unjust ? A. Yes ; I would plainly say it was unjust.
. Q. Therefore, if there is any justification to be made, it is
to be made by the railway company acting on the defensive, to
prove the justification, and then von will determine, in a par-
ticular case, whether or not it is just ? A. Allow me to modify
my answer to the first question ; for example, there are two dry
goods merchants; one might receive his freight all by the car-
load, and one might receive it by small packages ; in that case
it would not be an unjust discrimination to make different
rates, as I have fully explained in this book ; therefore it
merely shows the necessity that you should inquire before you
make iip your mind whether a discrimination is just or not,
that you should inquire into the conditions under which the
shipments are made.

Q. I'^ou are not true to your principles ? A. I am.

Q. I think not ? A. You will find it laid down in the book
here.

Mr. LooMis — The witness should be left alone, and he should

497

not be told that he is not true to his principles; I have no
doubt it is his zeal that calls it out, but it is indecorous.

The Witness — I can explain to Mr. Sterne that he accused
me wrongfully in this matter ; I have laid down a principle
that car loads could be carried at less than smaller lots, and I
said that before, and I say whether the two shippers in Syra-
cuse which you mentioned, have been unjustly dealt with,
that there has been an unjust discrimination in favor of one of
the shippers ; I Avould first put the question, was the shipment
to one made by car loads and the shipmeuts to the other made
by small parcels? if that is answered in the affirmative, if this
was made by car loads, I would say that the difference in the
rate in favor of the shipper by car loads would be justifiable ;
I would always enquire into the conditions under which the
shipments were made whether they are justified or not.

Q. Would you, under given circumstances, justify any
difference ; you have laid down the principle which is either
correct or incorrect in which you say " Nor do I think it is
right that common carriers should malie special contracts on
account of the quantity shipped, except when quantity forms
an element in the cost of ths transportation service, and this
is only the case when the quantities are less than car loads ?"
A. Tes, sir ; that is the case I said.

Q. Should the smaller shipper be charged any more than the
larger shipper, than the mere cost of transportation services to
him, as compared with the larger shipper ? A. The smaller
shipper ought to be charged an increase, in proportion to the
increased cost of performing tlie work for him ; that is the
proper'principle.

Q. And no other discrimination do you regard as a proper
principle, which disregards the element of the cost of the
transportation ? A. There are a great many other discrimina-
tions made between shippers.

Q. Between the larger shipper and the smaller shipper at the
same place, do you regard aay other discrimination as just, ex-
cept the mere question in the cost of transportation? A. I
do not.

Q. As between the shipper who ships ten car loads and the
shipper who ships one car load, you do not justify any dis-
crimination at all ? A. I do not think it proper to make the
51

498

discrimination, on account of ttie difficulty of drawing a proper
line on which this discrimination could be made.

Q. You state here that there is no difference in the cost
— it don't cost any more to carry ten car loads of freight be-
tween two stations A and B for one shipper than it does to
carj'y one car load for each of ten shippers ? A. There is no
difference in the cost of material since I wrote that ; this part
also has been questioned very much by many railroad men.

Q. I did not ask you that ? A. I must tell you, because it
has given me occasion to think about it ; while I still hoM
substantially to the same opinion, I think there is some cause
on the part of the other side to show that there is an in-
creased cost.

Q. The difficulty is that I do not feel that you ought to tes-
tify what other people tell you ; I am" asking simply for your
own opinion?

Mr. LooMis — The difficulty is that the answers do not suit
you ; since those answers were published he has derived more
information on this subject, which has given him occasion to
reconsider, to some extent, the answers lie gave then, and
now, when he desires to make these answers from his present
conclusions on the subject, j'ou obstruct him.

Mr. Stekne — I do not object to Mr. Fink giving any limita-
tion of his own views, but I do object to his stating to me what
other people told him of the objection to his views.

Tue Witness — I do not state what other people tell me, but
I merely state to you the reasons which I have for modifying,
to some extent, my positiveness in expressing those views ; I
hold those views now, as I did then, but I recognize the fact
that they are questions which are not finally disposed of —
that it admits of a different view to be taken of the subject.

Q. So does everything in this world ; let me understand yes
or no to the question I put to you ; do you, or do you not,
hold the views now that you held when you answered Mr.
Nimmo, in answer to question No. 6, in regard to discrimina-
tions ? A. I substantially hold those views.

Q. With reference to the question of the car loads, is that,
according to your mind, the standard or unit of charges ? A.
I do not fully understand what you desire to know — the stand-
ard or unity of charge ?

Q. Yes. A. I do not know what you mean.

49Q

The Witness — In explanation of any statement allow me tO
read from my answers in this book : " Rates of transportation
should be reasonable, they should be uniform and permanent,
as nearly as the conditions of cost and the natural laws of
competition permit; they should be alike to all parties situ-
ated alike, and should be properly adjusted, so as not to dis-
criminate unjustly between dififerent individuals and communi-
ties. To attain these objects under the present management
of the competitive transportation business, is simply impos-
sible."

Q. Then you think competition an evil ? A. A great evil ;
I make a distinction between competition and competition.

Q. Take a given point on the line of a railway, where during
the winter mouths, there is no competition at all, practically
with the railway, except the ordinary turnpike ; where there is
no elements of competition at all, then the remark that you
have just read, that the transportation rates should be reason-
able, that they should be alike to everybody, would strictly
apply? A. I think so; yes, sir.

Q. You also say in that connection, that rates of transpor-
tation should be reasonable ? A. If I understand your ques-
tion correctly — you say where there was no competition what-
ever, except the turnpike.

Q. Except the turnpike during the winter Tnonths ? A.
There is competition during the summer time.

Q. Yes? A. I understand ; you take a case where a canal is
in operation.

Q. Take a case, where foi' the time being, there is but one
railway, and that railway is the only maker of rates ? A.
During the whole year?

Q. No? A. I think that modifies somewhat the position,
as I understand it.

Q. Where a railway during six months in the year is the
maker of rates — but one single railway — should rates of
transportation be reasonable on that railway to a certain
given point ? A. They should always be reasonable.

Q. Should they be uniform and permanent ? A. In regard
to the canal and the competition that is carried on for six
months,! can conceive a case whe;'e a shipper agrees with a
railroad company to ship — and all shippers would do the same
at certain rates during the whole year— he may pay more dur-

500

ing the summer months than the canal, and pay less during
the winter months ; that is the diflicultj'- of answering your
questions in such a general way.

Q. You experienced no such difficulty with Mr. Nimmo?
A.. I say here in the paragraph that I just read that the par-
ties must be situated alike, that the same rates should be
made — situated alike, that is, under the same conditions.

Q. "What does that mean? A. It means a good deal; it
means that you have to bring into consideration every element
that bears upon the condition under which you perform the
service, and which I have stated before, is not one that you
can formulate a general law to be guided by.

Q. You did formulate general laws to be guided by ? A.
I did formulate them, and I apply them ; 1 say that every
shipper situated alike, must have the same terms ; now, the
question comes up, who is situated alike ; that is a practical
question that has to be considered in every case ; you can
form no general rule to determine that, and whenever you
mention a special case I have to enquire into the condition
under which the services were performed before I can give you
an answer, hence you must not expect me to give a general
cast-iron rule by which you. can adjust all oases.

Q. Did you not in answer to question six, of Mr. Nimmo,
lay down some general principle? A. Certainly, but it is one
thing to lay doM^n a general principle and one to apply it to
all cases that come up in practice.

Q. I did not give you a special case at all ? A. Yes, sir ; you
did, you wanted to know in case of a turnpike for six months
of the year, and I then made the additional enquiry as to the
conditions that bear upon that case.

Q. Suppose the railway was the only railway to a given
point, and there was no canal, would then your answer apply?
A. Yes, sir ; then it would apply.

Q. Absolutely ? A, Yes, sir ; between two shippers situated
alike, there should be no discrimination ; any discrimination
that is made in that case is unjust.

Q. You did not read the whole of the subsequent part
of your answer, that you read, in which you say : "Intelligent
co-oporation between all the transportation lines which can
influence a tariff under proper organization and regulation
becomes absolutely necessary " ? A. Yes, sir.

60i

Q. And tlien you say : " Whether this co-operation can be
secured by a voluntary action of the transportation companies
is doubtful; govermental supervision and authority may be
required to some extent to accomplish the object ; " is that
still your view ? A. That is still my view.

Q. That you cannot get along without govermental supervi-
sion ? A. I do not say that, but it may be.

Q. But that without govermental supervision and authority
you cannot attain that object ? A. Yes, sir ; wait a minute ;
you are too fast ; I say here, that this may be necessary to
carry out these measure and I think so' now ; we are endeavor-
ing to carry them out now, without the government super-
vision.

Q. By the pooling, arrangement ? A. By the arrangements
we have now, but wdiether that will be successful or not
remains to be seen, and I am inclined to think that cer-
tain aid from the government which I will be glad to point
out at some other time, would be useful in strengthening this
arrangement and carrying out the object we all have in view,
to stop the abuses that have slipped into the railroad manage-
ment and to reform them.

Q. Your pooling arrangement v/ill not then \dthin any
period of time that you now think of, regulate the rate from
New York to Syracuse on the ISew York Central Kailway, or
regulate the rate from New York to Binghamton on the Erie
or between Binghamton and Elmira ? A. I have no connec-
tion with this arrangement, but they could be made just
as well.

Q. There is nothing now in existence, which looks' to any-
thing like openness of rate or certainty of rate, or doing away
of unjust discriujination between these various points that
you have aiiything to do with ? A. I have nothing to do with
it, but there have been such arrangements, and I hope there
will be again, as between the Erie and New York Central ; they
have had arrangements of that kind looking to the abolish-
ment of the present abase which is the same in regard to the
local business, as existed in the through business.

Q. What arrangements could there be between the New
York Central and the Erie, by which the Erie would have any
interest in protecting a point not touched by the Erie's busi-
ness ? A. One point influences all other points ; for instance,

66^

the Erie Railway comes into contact with the New York Cen-
tral at Rochester ; if they could make an arrangement to
agree upon the rates and stop the competition between them,
by which each one tries to get all the business from Rochester
and use all means possible to get it, instead of doing that, if
they could agree to maintain the tariffs it would affect all
other stations adjacent to Rochester ; the rates all depend one
upon the other ; when you make a rate to Rochester it is
necessary you should modify your rate this side of Rochester
and the other side, to a certain extent.

Q. When you speak' of influences, do you mean it is done
invariably ? A. It is in most cases actually necessary.

Q. Do you mean to say that when they establish a rate to
Rochester, that a rate is fixed between the Erie and New York
Central at Rochester, that you know of your own personal
knowledge, that iuvariably Mr. Goodman, of the New York
Central office, makes a corresponding rate to Utica and every
other point ? A. I say I know nothing about what they
actually do, but it is necessary that it should be done.

Q. As matter of justice ? A. Not only as a matter of justice,
but as a matter of necessity.

Q. Why? A. For this reasDu, if they wish to obtain the
full amount of business that they could obtain ; if they want
to throw away business, they need not do it.

Q. Explain why that is necessary ? A. If you make a rate
at Rochester very low, and then you make a rate five miles
from Rochester very high, people would not ship to that sta-
tion ; they would ship to Rochester, and haul their freight to
that next place; it might be cheaper for them to do that.

Q. It might not be ; the local tariff might be so high from
Rochester to the other station that it would be impossible for
them to do it ? A. Of course it depends altogether upon the
rates ; they could ship to Rochester, and then ship again from
Rochester to the other station ; I want to illustrate how the
rate at one place may affect the rate at other places ; that rail-
road companies are obliged to modify^their tariffs ; when they
modify them at one place, they are generally obliged to modify
them at all others, to a certain degree and extent.

Q. When they do not it results in an unjust discrimination '?
A. When you put down the rate low at competitive points, and
keep it high at other points, it amounts to unjust discrimina-

503

tion, although the man who lives where he has the highest
rates pays no more than he paid before.

Q. His business goes away from him? A. It might or
might not; that is according to the relation between .the two
cities.

Q. Therefore there is such a thing as an unjust discrimina-
tion between places where rates are fixed by competition, too
low at one place and kept up at the other ? A. That is the
great cause, and almost the only cause of unjust discrimina-
tion ; in the majoritj' of cases that is really the cause of unjust
discrimination.

Q. You do not mean to say that that is the only cause that
exists of unjust discrimination ? A. Not the only cause ; but
perhaps nine-ienths of the unjust discrimination arises from
that cause.

Q. What do you mean by saying that the rate should not
depend merely upon his will — that is, the common carrier's
will ? A. There should be some good reason that guides all
business men in the transaction of business, some principle
that ought to control the making of rates.

Q. Don't you mean by that the cost of transportation and
a reasonable profit "on that? A. Not that alone; there are
many elements that enter into the making of tariffs ; it is
not the cost of transportation alone ; that is an element to be
considered.

Q. If it is not that, that if you say he ought to consider —
putting it iu a concrete form, Mr Vilas of the Erie and Mr.
Goodman of the New York Central, or the gentlemen who fix
the rates — if you say that he, Vilas or Goodman, should not
allow the rate to be dependent upon his will, what do you mean
by that? A. I mean it should not be arbitrary, without sense
and reason.

Q. Then if there is sense or reason in it, is it not dependent
upon his will ? A. No, it is not dependent upon his will ; it
is dependent upon general principles by which business is con-
ducted by all sensible men.

Q. Is not all ordinary business conducted by sensible men
with some regard to the cost of transportion and service ? * A.
Certainly, every business transaction is conducted with some
regard to the cost of producing the articles you have to sell,

504

whether it be transportation on any article that you manufac-
ture.

Q. But if the business of producing them is conducted
without regard to the cost of transportation, it is not a reason-
able way of doing business ? A. It is not a profitable way of
doing business-

Q. It is not a reasonable way ? A. It is not a reasonable
mode.

Q. You would not consider it a reasonable mode ? A. I
would not consider it would last very long.

Q. What are the elements which enter into the question of
cost of transportation ? A. That is a very comprehensive
question ; I would have to write a treatise on that to answer
you.

The Chairman — That is the question I would like to hear
you answer.

Q. I will divide it up : First, let me ask you whether you
consider a provision of law to avoid unjust disci imination,
such as I find in the Eailwaj and Canal Traffic Act of 1854 — an
English Act — a proper one ; " Every railway company and
canal company and railway and canal company, shall according
to their respective powers, afford all reasonable lacilities for the
receiving, forwarding and delivering of traffic upon and from the
several railways and canals belonging to and worked by such
companies respectively, and for the return of carriages, trucks
boats and other vehicles, and no such company shall make or
give any undue or unreasonable preference or advantage to, or
in favor of, any particular person or company, or any particular
description of traffic in any respect whatsoever ; nor shall any
such company subject any particular person or company, or
any particular description of traffic to any undue or unreason-
able prejudice or disadvantage in any respect whatsoever;" is
that according to your opinion a proper provision of law for
the purpose of avoiding these unjust discriminations you have
spoken of? A. I do n9t know ; that is a hard question for me
to decide.

Q. You have given to this subject your thought ? A. I have
already stated my views on that subject; I think you can
draw the conclusions.

Q. You have given the subject a great deal of consideration
in consequence of which you have been selected by Mr. Nim-

505

mo, to give him for publication throughout the United States,
your views as an expert, ; now, those views have been pub-
lished, and yon have stated that you do not believe that, with-
out governmental aid and supervision there can be a preven-
tive of unjust and improper discrimination ?

Mr. LooMis — He has not said so in his evidence here to-day ;
he said the arrangement now in force was endeavoring to at-
tain an end which governmental aid might attain.
Mr. Sterne — He does not say that.

The Witness— I say that we are now endeavoring to carry
out these reforms in railroad management, correcting these
abuses that have crept in, by voluntary co-operation; that is
a question, whether we can succeed in that; that it maybe
necessary for the government to give us aid — I do not say what
kind of aid.

Q. Is this the kind of aid that you have in mind ? A. The
passing of statute laws ?

Q. The passing of a statue law preventing unjust discrimina-
tion ? A. I think that would hardly reach the case, because
we have had these laws all the time.

Q. Where have you had them ? A. The common law pro-
vides for the very thing ; this is merely a statute law expres-
sing the principles of the common law.

Q. Your opinion is that there is now a common law which
prevents A from getting a lower rate at Syracuse under pre-
cisely the same circumstances, doing business under precisely
the same circumstances, than B from New York? A. That is
my belief ; I think that a shipper has a right to sue any rail-
road company that makes unjust discrimination against him
under the common law ; that has always been my understanding,
and I have always felt bound as a common carrier.

Q. Did you ever at any time have a position as traffic
manager ? A. I had the general management of the road.

Q. Of the Louisville & Nashville Road ? A. Yes, sir.

Q. Had you tariff rates from point to point along the line
of your road ? A. We had a tariff regulating the rates from
point to point.

Q. On the local points of your road ? A. Yes, sir.

Q. Did you adhere to that tariff? A. Most of the time ;
we made some reduction ; I want to explain about that.

Q. You did not answer my question ? A. When I get through
52

506

I will have answered your question exactly ; the making
of a railroad tariff is a very complicated business ; you make
to-day a railroad tarifl that is perfectly satisfactory to your
own mind, and covers all the cases according to the best in-
formation that you have ; to-morrow, the first thing when you
come to your office, a man comes in and points out to you
that such and such a rate does not operate properly upon him ;
of course, you consider his case ; in the course of a week, or a
month or six months, you get 100 or 500 of such cases, and
you try to adapt as near as possible your tariff to the necessi-
ties of the countrj', and to the necessities of the people; and
in the course of a little while you find that the tariff that you
used a year ago has been modified by special arrangement to
a great extent ; and then you go to work and try to embody
the changes in a general tariff as near as you can, but as to

making a tariff, that covers every point

Q. You are not answering my question. A. Allow me to
finish my answer.

Mr. LooMis — The witness should be allowed to make his
explanation.
The Chairman — Let the witness go on.

The Witness — Mr. Sterne asked me whether I had made
any deviation from the tariff while I was manager of the Louis-
ville & Nashville Eoad, and I answered yes, and I think I have
a right to state why it was necessary.

The Chairman — You are here to give the Committee the
benefit of your opinion. Mr. Sterne, in conducting your ex-
amination, is entitled to call your attention to these different
topics in a particular order, and have his questions answered
in the form in which he asks them. If they are not proper,
the counsel will object, and we will pass upon them, but you
shall, after you have answered his question, have an oppor-
tunity to make any explanation that you desire.

The Witness — I would like to qualify my answer while the
matter is right on my mind. I would not think of it after-
wards, and I do not wish to leave the Committee under a
wrong impression. I think I have a right to answer the
question fully, and state the causes and elements that led me
to answer the question as I did. I understood Mr. Sterne to
say you were here to get the whole truth, and I suppose it

507

would not be improper for me to state the case in my own
way, so as to get the whole truth.

The Chairman — The witness was asked whether he was traffic
manager of ft certain railroad, and whether he adhered to his
tariff; he may answer that question direct, without any expla-
nation, wiihout compromising himself in the least.

Witness — I think I ought to state why these tariffs were
changed ; I have committed myself to certain principles which
are published, and when I state I have not adhered to them, I
think I have a right to state the reasons why.

Q. I do not want to catch you at all, nor do I want to place
your testimony in any wrong light ; all I want, is to get from
you answers to certain questions ; what I want to know from
you is, that having made a tariff for local points on your rail-
road, did you, while that tariff was in existence, adhere to it in
the main? A. I always endeavored to adhere to it as far as it
possibly could be adhered to, but it was not always possible to
adhere to it; changes had to be made from time to time.

Q. Those changes were not made in the tariff itself? A.
They were not generally made in the tariff itself ; they were
accumulated as special rates — special charges.

Q. What percentage, think you, of the whole of the local
tariff that you carried on your road, did you carry according to
the schedule rate, and what percentage, think you, did you carry
at a special rate ? A. I could not answer that question ; it
would be impossible to ascertain that.

Q. I do not ask you as to particular percentages as to limit-
ing you to one or two per cent., but what think you was the
proportion ? A. I have no idea about it ; I could not express
any opinion whether it was one per cent, or ten per cent. ; of
course I have never given the matter a moment's reflection as
to the quantity that was carried by special arrangement to the
local points ; it is utterly impossible for me to answer that
question ; I can only say that I avoided all special arrange-
ments as much as they could be avoided.

Q. Do you think you carried ninety per cent, of your local
tratfic by special arrangement ? A. It is no use asking me.

Q. You won't answer ? A. I cannot answer, because I do
not want to guess at it.

Q. So you have no means of knowing at all to what degree

508

you adhered to your local tariff? A. Not as to quantity, not
the least idea.

Q. Can you tell this Committee whether or not you adhered
to it sufficiently to still regard it as a tariff at all ? A. Yes,
sir ; always regarded it as a tariff ; there was always a tariff in
force that was adhered to as a rule.

Q. And, therefore, the special arrangements thatwere made
were the exception ? A. They were the exceptions.

Q. Had you your tariff posted ? A. The tariff was printed.

Q. And posted ? A. It was posted ; I don't know to what
extent ; it was posted in every office.

Q. Could anybody ascertain what the rate was from one
given local point to another local point without inquiring of the
general manager ? A. I hardly think they could ; one has to
be familiar with the construction of the tariff to be able to
ascertain that.

Q. Could anyone ascertain by looking at the tariff — was it
physically possible for him to ascertain the rate ? A. It would
require someone familiar with the method in which tariffs are
made out to understand it ; you could not understand it by
merely looking at the tariff ; it would take you some time to
figure it out ; it could be figured out by anybody who was
familiar with the method in which tariffs are made up.

Q. Give me two local points on the Louisville & Nashville
Railroad- -name two local points ? A. Take Bowling Green
and Gallatin.

Q. Suppose a shipper at Bowling Green wanted to ship
from Bowling Green to Gallatin a certain quantity of goods
how would he get his rate at Bowling Green ? A. From the
agent, who has the tariff in his office.

Q. And those goods were shipped generally at the local tar-
iff? A. Yes, sir.

Q. He would not, under those circumstances, first have to go
to your office at Nashville or Louisville for the purpose of as-
certaining what rate the goods should be shipped at ? A. Not
for any regular shipment, except it was by request of the ship-
per to make special arrangements from what the tariff called
for ; then he would have to refer to the general office.

Q. That would be an exceptional case? A. Such cases
happen every day almost.

Q. Along the whole line of the road ? A. Yes, sir ; special

509

arrangements are called for, but they are not always made ;
there is a constant application.

Q. From every point ? A. Almost.

Q. Every day from every point ? A. No ; not every day
from every point, but, if you are familiar with the general
freight office, you will find that there is hardly a day when an
application of that sort don't come in the office, where a ship-
per wants to make a special arrangement ; but it takes two
parties to make a special arrangement, and the shippers are
generally those who are most interested.

Q. Have you got the report of the operation of the Louis-
ville & Nashville Eailroad from 1873 to 1874 ? A. I have it,
but not here, but an extract of the report.

Q. Have you an extract to which you referred as to what
you call just and unjust discrimination ? A. Yes ; I have it
here.

Q. Will you let me have that? (Witness produces pamphlet.)
Tou still adhere to this principle ? A. I have not read it for
some time ; but after you read it I will be better able to tell
whether! have changed my ideas.

Q. You have stated just now, that you desired to have this
introduced ? A. Yes, sir.

Mr. Depew — The whole report ?

Mr. Stekne — No ; what he has marked.

Mr. Depew — We insist on the whole.

Mr. Steene — We are willing to take that as Mr. Fink's
opinion, including the just and the unjust discrimination.

Mr. Depew — I object to Mr. Sterne's selecting that which
meets his case, and rejecting that which does not ; I want the
Committee to have the whole thing.

Mr. Stebne — We will take the whole of that book as Mr.
Fink's opinion on that subject.

(Pamphlet entitled " Cost of Eailroad Transportation, Rail-
road Accounts and Governmental Regulation of Railroad
Tariffs, by Albert Fink," received in evidence, and marked
" Exhibit No. 3, June 20th, 1879.")

By Mr. Stebne :

Q. Is thore any information in this book (handing witness

510

another book,) that is not in the other one ; If so, we want it ?
A. Yes, sir.

Q. When did you make these tables ? A. Those tables were
made in 1S72 or 1873.

(Pamphlet entitled " An investigation into the cost of pas-
senger traffic on American railroads, with special reference to
the cost of mail service, and its compensation, by Albert Fink,
C. E." from page d to caption " Cost of transportation on pas-
senger trains,'.' page 13, inclusive, received in evidence, and
marked " Exhibit No. 4, June 20th, 1879.")

Q. You have given attention to this subject of the influence
of bulk of traffic upon the cost? A. Yes, sir.

Q. You have given in these books a marked illustration in
the difference between the cost of transportation on the main
stem of the Louisville & Nashville Bailroad, as compared
with the Glasgow branch ? A. Yes, sir.

Q. Showing that in one case it was, I believe, something less
than one cent per mile, per ton ? A. A cent and xV) I believe,
including the interest charges in both cases.

Q. In the other something between 15 and 17? A. 17, if I
recollect right.

Q. And that you attribute to the bulk of the traffic ? A.
Partly.

Q. Not wholly — isn't it almost wholly? A. Not wholly to
the bulk of it.

Q. What proportion of that percentage — you gave it as an
illustration of the influence of the bulk of traffic? A. Yes,
sir ; the bulk had most to do with it ; in the one case it is a
branch road that cost about the same per mile as the main
stem, and the interest on the cost of the road is distributed
over a very small tonnage, which, of course, increases the
price of the cost of transportation.

Q. Have you ever taken into consideration the difference
and advantage between the New York Central and the Erie,
arising from the same cause ? A. I have given no special at-
tention to investigating it, with a view to that particular fea-
ture.

Q. You don't know what the bulk of the traffic on the New
York Central is, in the way of local traffic ? A. I have com-
pared them ; I think the bulk of the traffic on the New York
Central, when I last investigated the subject, seemed to be very

511

much the same as on the Pennsylvania road, and it is more
now, I believe.

Q: Are you speaking of through traiEc ? A. I speak of the
whole commerce as it is reported by the New York Central in
its annual report, as compared with the Pennsylvania road ; I
mean the total traflSc.

Q. Have you any means of ascertaining how much New York
Central trafiBc came from local points to local points? A. No,
sir.

Q. You have also paid attention to the influence of curves ?
A. Yes, sir.

Q. On the cost of transportation ? A. Yes, sir.

Q. That bas considerable influence, has it not, the grades
and curves, as to the number of freight cars and passenger
cars that can be drawn by a single locomotive? A. Yes, sir.

Q. And in that way the cost of transportation may be very
much larger on one road than on another ? A. It varies with
every road.

Q. The curves and grades of the Baltimore & Ohio, of the
Pennsylvania Central, and of the Erie, are heavier, are they
not, than on the New York Central ? A. On some portions
of the road they are, and on others they are not.

Q. I mean as a whole, are not the curves and grades of the
three roads I llave named heavier than the curves and grades
of the New York Central ? A. That is my impression.

Q. To what degree that influences the cost of trasportation,
as compared between those different roads, you do not know ?
A. I do not, except I figure it.

Q. Therefore, for this Committee, to enable them to figure out
that difl'erence between those four roads, as compared with the
formulas you have given in your book, it is necessary for them
to have the data of what the curves are, and what the grade
is, to determine it upon the data which you have given in your
book ? A. No ; I think you can form some general idea from
the reports of the different companies ; they generally give the
cost per ton per mile in transporting the tonnage ; they give
the cost per passenger, and you can find out from those official
reports, as near as may be, the relative cost on those different
roads, not only due to curves and grades but everything else.

Q. Do they include, or do they not, their capital account, in
estimating that cost ? A. No, they do not ; they give simply

512

the cost of operation ; tlie capital account is an entirely differ-
ent item of cost, which can also be computed, bnt it is gene-
rally not stated in railroad reports ; the interest upon the
investment is not stated as an item of cost of operation,
but it is an item that you can always get at and calculate.

Q. In getting at the amount of cost per ton per mile, do
they, or do they not, usually include the interest ? A. Never ;
it is hardly ever stated, except specially mentioned, and when-
ever you hear it spoken of that such a report gives the cost
per ton per mile, it does not include the interest as a rule, but
simply the operating expenses.

Q. Tour estimate of cost per ton per mile, was made in
those books, that we have but in evidence, in 1872 was it not?
A. 1873 and 1874, I think.

Q. Considerable reductions in price of commodities have
since taken place, in the cost of rails, and the cost of labor ?
A. Yes, sir ; the introduction of the steel rail has been one of
the elements that has reduced the cost.

Q. But in addition to that, the absolute first cost of the
steel rail now, as compared with the cost of the steel rail in
1873, is very much less? A. Yes, sir.

Q. Almost fifty per cent, less ? A. Yes, sir ; less than one-
half.

Q. That is true also of labor ? A. Labor, %lso, in a great
measure, from thirty to fifty per cent, reduction.

Q. In box cars and locomotives there has been a consider-
able reduction ? A. All material, or nearly all, entering into
the cost.

Q. Therefore in estimating the cost per ton per mile, ac-
cording to the data that you have there put down, you must
make a general reduction of from 15 to 50 per cent, from that
eatimated cost ? A. About that ; it varies on different roads.

Q. In determining the rate to be charged from Baltimore
and Philadelphia at certain percentages, less on westward
bound freight than from New York, had you anything to do
with the determining of those rates ? A. Nothing at all ; that
was all arranged before I became connected with the trunk
lines.

Q. You found that percentage calculated and in existence
when you came here ? A. The contract antedates my con-
nection with the roads.

513

Q. And you simply were placed here to see that it was faith-
fully carried out ? A. You are speaking of another contract ;
the contract in regard to the division of the traffic had nothing
to do with the contract for the fixing of the lates between the
different cities.

Q. The contract fixing the rates between the different
cities, as I understand you was made before you came here ?
A. Yes, sir.

Q. Do you know upon what principle that is fixed? A.
There is no principle about it, except a simple agreement
between the different parties that influenced the roads that
have control over the rates ; they come together and make the
best bargain they can ; the New York roads reduced those
differences to a minimum, and the Philadelphia and Baltimore
roads tried to get the most they could, and that is the squabble
that is between them to decide.

Q. There is, therefore, now in existence a rate, by virtue of
which there is an advantage for an importer "o bring his goods
through Philadelphia and Baltimore to the western centre ?
A. The agreement at present which is merely an agreement —
nothing is in force now — is that the rates from the seaboard
cities should be the same from the point of shipment to the
point of destination by all roads, whether by Baltimore or
Philadelphia or New York or Boston ; that is the idea and
principle which the trunk lines wish to carry out ; that is the
agreement between them, I may say.

Q. It is not so now ? A. That is the existing agreement ; I
don't say it is carried out.

Q. We have had the testimony of Mr. Eutter, who says
there is a discrimination in favor of Philadelphia and in favor
of Baltimore? A. There is a difference in tLe local rates ; on
the through business they all endeavor to maintain the same
rate from the point of shipment to the point of destination ;
that is tlie present agreement, which is not being carried out.

Q. You say it is not carried out ? A. There is no rates at

all.

Q. You have read to us certain percentages as fixed from
Baltimore and Philadelphia as compared with New York-
are they carried out ? A. I thought you spoke of the east-
bound business ; I was speaking of the eastbouad and you
were speaking of the west ; in regard to the westbound bus-
53

514

iness, the real contract which is being carried out is, that the
rates on imported goods should be the same from the seaboard
cities as it is from the local shippers from the seaboard ; that
is to say, any shipment made from Liverpool goes from here
to Chicago for the same rate as a shipment made by a New
York merchant ; that is the agreement which, I believe, is
faithfully carried out to the best of my knowledge.

By the Chairman :

Q. But if it was shipped from Liverpool to Baltimore and
then to Chicago, would it be three cents less ? A. Yes ; upon
the westbound ; upon the eastbound it is not so.

By Mr. Stebme :

Q. Confining ourselves to the westbound, it is less from Bal-
timore than it is from New York ? A. Three cents less.

Q. And from Philadelphia it is less? A. Also less

Q. And from Boston it is the samcs ? A. It is the same.

Q. On what principle is 'it that it is less from Philadelphia
and Baltimore and the same from Boston in comparison with
New York ? A. Will you allow me to put in evidence a little
treatise on the subject explaining that better than I could
explain it now.

Q. That was prepared by you on the Regan Bill before Con-
gress ? A. No ; it is not on the Regan Bill.

Q. On the letter of the merchants ? A. Yes, sir.

Q. You departed a little from the position of expert, I
think ? A. You mean it don't suit you?

Q. No ; I mean it does not suit you? A. ies; it suits me
exactly ; on that point I have not changed my views at all ;
vou asked me a question; that is answered here.

Q. I don't want to take a book which was intended as a
replv to the public position taken by certain people on that
question ; perhaps the one side was a little strongly stated?
A. I am not a lawyer, I always state the facts and the truth ;
al'ow me to qualify that I don't do any special pleading.

Q. Let us know, if you can in a few words, why it is that the
rate is fixed the same from Boston as from New York, and the
discrimination made against New York as to Philadelphia and
Baltimore ? A. I have tried to find out the same thing for a

515

long time, and tliat rate has been in existence so long — not
before I was born — but before I had anything to do with rail-
roads ; I have asked that questiou of Mr. Kutter, and it was so
fixed before he came here ; but there is a good reason for it.

Q. Wliy is it ? A. I was going to give you the reason ; I
have given the reason here in this book.

Q. No, I don't want the book.

Mr. LooMis — You can state it from that book, if you desire.

Q. I want you to confine yourself to my question — what is
the reason ? A. I have stated before, that these differences are
fixed arbitrarily between the roads ; there is no principle,
except each road wants to make the best bargain it can for the
city for which it works ; there was carried on before this con-
tract was made, a violent war, which cost the roads some five or
six — I don't know how many millions of dollars ; I believe this
was written about that time ; millions of dollars are now abso-
lutely wasted by the trunk lines in the attempt to determine by
warring upon each other, the relative rates which should be
charged on grain to New York, Philadelphia and Baltimore ;
in the meantime a certain distribution in the business takes
place ; no Hue get all or can expect to get all ; would it not be
bettor to settle this question upon the principle of distance
or fair proportion of traffic, rather than to destroy each other
in the attempt to overreach each other ; here you have a fair
example of how the war between the trunk lines is a war, each
for the interest of each city with which the road is identified.

Q. Do you think that is an answer to my question ? A.
Yes, sir.

Q. I asked you strictly as to a particular rate, why is it,
that there is a discrimination made against New York in favor
of Philadelphia and Baltimore as to rate, and none as to
Boston in favor of New York? A. As I understood, you
wished to know the reason as to all other points ; I must
answer the question in connection with other points ; I cannot
pick out Boston, and tell you the reason tvhy this is done, with-
out referring to the reason that controls the whole subject, as
illustrated by the fixing of the differences in regard to Phila-
delphia and Baltimore ; the reason is evident that Philadel-
phia and Baltimore are nearer to those points very consider-
ably than New York, and they make the rates somewhat in
proportion to the distance.

516

Q. But as to Boston, they do not ? A. Not as much as the
distance calls for ; the difference between Boston and Chicago,
and New York and Chicago is about 50 miles, and the dif-
ference in favor of Baltimore — I don't know whether I stated
it in miles here or not (referring to the book) ; the difference
between Baltimore and Cincinnati and New York and Cincin-
nati is i)3 per cent, in distance.

Q. That is not taking a fair point ; we have been told here
that Chicago is the point ? A. The same applies to Baltimore
by the New York Central Railroad.

Q. Yon cannot calculate the distance in that way to go all
around by the New York Central to Baltimore ? A. I don't say
that — New York Central to Cincinnati.

<^,. Chicago is the point which we are told here by
railway experts is the determining point ; take the point
Chicago ; Chicago is how much farther bv the way of the
Pennsylvania road from New York than Baltimore is ? A. I
don't understand exactly — -you want to know how far Philadel-
phia is from Chicago?

Q. What distance is Baltimore from Chicago, by its shortest
line, and from New York to Chicago, by its shortest line ? A.
I cannot give you. the figures without bringing a pamphlet
with me.

Q. I want to know the principle which determines these
rates, by virtue of which New York is placed at a disad-
vantage with Boston, in consequence of its being nearer
to Chicago than Bo&ton, and is placed at a disadvantage
with Philadelphia and Baltimore, by reason of its being farther
away from Chicago ? A. It is not placed at a disadvantage
in comparison with Philadelphia and Baltimore ; Baltimore and
Philadelphia are placed at a disadvantage in regard to the
distance, in comparison with Boston ; you cannot take any one
particular distance, you have to take each particular distance
and demonstrate it at those particular places ; in a general way
I answer your questions, that the distance has very little to do
with the making up of tariffs ; it has some effect, but don't con-
trol it altogether ; they have no tariff made out according to
the distame; that principle is not recognized in any railroad
tariff that I know of for competitive business ; the distance is
used for a general guide, but not to make an absolute basis of
a tariff ; I have shown here that in making the rate from Cin-

517

cinnati to Baltimore and New Tork, if distance were to be the
guide, the average difference in the rates would be ITg cents,
when the actual difference that has been agreed upon by these
gentlemen, is only 5^ cents, taking Cincinnati and taking
Chicago, if you choose ; I have a computation made on Chica-
go, for the Pennsylvania Railroad.

Q. Cincinnati is not a fair point, as it is nearer Baltimore ?
A. It is a point to illustrate the principle.

Q. We have been told here that Chicago is the distance from
which all things are calculated ? A. You are mixing that thing
up ; Chicago has nothing to do with the question at all ; Chicago
is made the basis on which the distances are calculated ; you
might just as well have taken Baltimore ; it is altogether arbi-
trary ; you want to have one measure by which you measur-
all the other tariffs, but that has nothing to do with the distance
that exists between the various cities which need not be mixed
up together at all ; the distance from here to Chicago is the
unit on which the various tariffs are based to other cities from
New York ; but as regards to the differences in rates, they are
the same from Chicago as they are from Cincinnati ; that is,
to Baltimore from Cincinnati it is only three cents on east-
bound business less than it is to New York ; from Chicago to
Baltimore it is three cents less than it is to New York ; the
actual distance is disregarded ; the fact is generally recognized
that Baltimore has a shorter land carriage than New York to
the west ; that Baltimore, in other words, is nearer to the in-
terior of the west than New York — that New York is further
off ; and that general fact is recognized and determines the
principle ol making some sort of recognition in favor of Balti-
more, because it is nearer to the markets of the west, but the
actual amount is altogether arbitrary ; in regard to Boston,
while there is only 50 miles, as a whole diff'eience between New
York and Boston —

Q. By one particular line? A. By all the New York hues.

Q. No ; by one line ? A. By the New York Central line, and
it is the same by the Erie.

Q. It is in evidence here that it is 220 miles by the Erie?

Mr. Blanchakd : By way of New York.

Q. It is 185 miles by the other way to carry freight ? A.
You always take the shortest distance in regard to such mat-
ters, the lines are at a disadvantage in having a long line, and

518

they get less pay for it, but the shortest distance settles the
rate question ; Boston has the disadvantage of being 50 miles
further than New York, and tbat distance is entirely disre-
garded on the westbound, while on the eastbound they actu-
ally charge more ; you see there is an arbitrary arrangement in
this matter ; on the eastbound they actually charge five cents
more, which is not justified by distance at all.

Q. On the westbound, in point of fact. New York don't get
the advantage of her closer proximity to the west, as compared
with Boston ? A. On the westbound it don't get the advantage
to the extent of 50 miles.

Q. It don't get the advantage of 220 miles by the Erie ? A.
That has nothing to do with it ; j^ou must take the shortest
distance to argue from.

Q. Why? A. Because Boston has a route that is .50 miles
only farther than this ; there are other roads that aie two or
three hundred miles further, perhaps ; but that is not the unit
on which you should make the comparison ; the Erie road is
longer, and that is the disadvantage of the Erie road, but it is
not the disadvantage of Boston.

Q. That arbitrary difference on mileage disregards the ques-
tion of bulk of trafiic entirely — it disregards the question of
the amount of traffic New York gives to her lines compared
with the amount of traffic that Boston gives to hers, or Phila-
delphia gives to hers, or Baltimore gives to hers ? A. If you
will read the chapter in my treatise which you have liere, you
Avill find that the distance has nothing to do with making the
tariff only to a general extent ; of course it' has something to
do with it ; the cost of transportation has nothing to do with
making the tariffs.

Q. Has nothing to do with it? A. It has a certain influence
— it is one of the elements that enters in, but it is by no means
the main element ; there are other controlling elements that put
the cost of transportation into the shade ; when a barrel of flour
is carried from St. Louis for 8 or 10 cents, the cost of trans-
portation does not enter into the making of such tariffs at all.

Q. Do you know of any such case where they carry a barrel
of flour forJS or 10 cents? A. That is so reported in the papers.

Q. You believe that is true ? A. I believe it is stated for
12 or 12J ; I have no actual information.

519

Q. Is such a carriage as that a profit or a loss ? A. That is
a dead loss.

Q. Why do the corporations do tliat ? A. Because they
can't help themselves ; they don't want to do it, but under the
present sjstem of management of competitive business, it. seems
to be impossible to avoid it ; it is an evil of the system under
which the transportation business of this country is now carried
on, and the very thing we are trying to remedy by voluntary
agreements of the corporations ; the transportation busi-
ness of the country is carried on by so many railroads, working
not together, but one against the other, like the feudal Barons
of old, each trying to grab as much properly as they can
grab, we have no coherence ; and in that struggle all the dis-
advantages that you complain of are produced, and it is only
by remedying those difficulties that you can rectify the evils
of the transportation system,

Q. I suppose one of the difficulties is the manner of education
of the men that have control of the great railroads? A. Yes, that
enters into every occupation of life ; one man understands his
business better than another ; they don't ;ilways do as they
ought to ; one lawyer is not as good as another, and one rail-
road man is not as good as another.

Q. You know tlie organization of the fast freight lines, do
you ? A. Yes, I am acquainted with them.

Q. Do you consider the'se an aggravation or a cure for the
evils of the railroad management ? A. I consider them the
offspring and necessary result of the competitive struggle of
the railroad companies, but they all become useless and un-
necessary, to a certaiu extent, as soon as that competitive
struggle ceases ; they ai'e the tools with which the competitive
struggles betweeu the raih'oad companies are carried on, and
the necessary outgrowth of that system of operation.

Q. Which you consider bad ? A. Yes, and everbody else.

Q. That results in rebates, secret rates, special discrimina-
tion and every conceivable discrimination ? A. It results in
all those matters that you complain of.

Q. And which are abominations, as you believe ? A. Yes,
sir.

Q. They are the necessary results of a bad system, as a
boil may be the necessary result of the disorganized condition
of the blood ? A. I don't think that is a good comparison ;

520

they are simply the tools with which they carry on a bad
system.

Q. Esplain to the Committee in what way the fast freight
lines is such a tool ? A. They consist of a combination, in
the first place, of the trunk hnes with a number of western
roads, forming different routes, as it were, to the points of ship-
ment in the west.

Q. A hand explains that, don't it; take the New York
Central as the main line — taking my band as an illustration
— you X say there are five fcst freight lines? A. Yes, sir.

Q. These five fast freight lines, for the sake of illustration,
all run to Indianapohs ? A. You will have to go further than
Indianapolis, because there are quite a number of lines to In-
dianapolis ; the five fingers of your hand would not he enough
to represent them.

Q. They branch off from some central point, say Columbus,
Ohio ; there they branch ofif, and one will go to Milwaukee,
another to Chicago, and a third to St. Louis, and a fourth to
Cincinnati and a fifth to Louisville, and all the intermediate
points? A. Yes.

Q. These fast freight lines are organized, as I understand it,
by each one of those railway companies giving a certam
number of freight cars to the co-operative line, and the whole
being operated upon that particular line ? A. Yes ; and each
one represents different interests'; your middle finger there
represents one road, and the little finger another road, all run-
ning over the trunk lines, the New York Central, if you choose.

Q. Now comes the system of rebates through this compe-
tition ; the White Line, and the Red Line, and the Blue Line,
and the Merchants Despatch Line all cut each other over the
same line to Columbus? A. Yes, when they do cut at all,
because the cutting is really done by the western connections ;
it all goes over the main line ; but, as between the Cincinnati
and the " C. C. & I." road and the Lake Shore Eoad, and the
other roads that are tributary, the competition between those
roads make the fast freight lines cut against each other, and
the trunk lines participate in this cutting ; this is a strange
thing, and I don't suppose you understand why it should be so.

Q. I understand why it is so and before you come to give
your explanation of it I want to have this further fact
illustrated before this Committee, that there may be, under the

521

present system, a train of-cars composed of three "White Lines,
three Red Lines, two Canada Southerns, ten Merchants Des-
patch, if you please, which carry for different shippers, each
at different rates, in the same train, to the same points ? A.
That may be so ; that is possible.

Q. And at the same time the trunk Hne, whicli is the New
York Central, by a system of special rates or rebates, carries
also to diff'erent shippers to different points different from its
own tariff ? A. They participate in these various rates that
are made by the fast freight lines on account of western coq-
nection.

Q. Beyond that, don't they, also, themselves, send out cars
which are not put in those lines? A. No, 1 think not; I
think all the competitive business from the west is done by
those lines.

Q. We have had testimony that it is not all done by them ?
A. It must be a small proportion ; they may come in and
cut themselves, but I don't think they do.

Q. So you have the condition of co-operative lines cutting
each other, and the general trunk lines cutting the co-opera-
tive lines, and the co-operative lines cutting the trunk lines?
A. Yes, sir ; allow me to explain why that condition should
so exist ; it is so strange on the face of it when you state the
case simply like that.

Q. I will give you every possible opportunity to explain, but
I want first the facts ; in addition to that the fast freight lines
have their expenses paid, and the expenses of the agencies
paid by the railway companies themselves ? A. Certain ex-
penses are and certain expenses are not, though that don't
change the principle.

Q. The main expenses are paid? A. The expenses of the
agency in New York are not. paid by the trunk line ; the west-
ern roads pay the soliciting agents; that is my understanding ;
a portion of the fast freight lines, expenses are not paid by
the trunk lines, but they are paid by the western roads.

Q. We have seen vouchers here representing other expenses ?
A. They are expenses of soliciting agents in the west, for
instance, and superintendence of the line and making out of
accounts.

Q. All losses are paid by the trunk lines ? A. Losses that
occur on the trunk lines,
54

522

Q. And all agreed rebates, drawbacks, constituting practi-
cally special rates, are also paid by these various lines ? A.
That depends upon circumstances ; if they are a party to it
they are paid, but it very often happens that they make rebates
on the western roads without knowledge of the trunk lines ;
they will make it in the west and the trunk lines know nothing
about it ; 3'ou give the bill of lading at schedule rates, but say
the C, C. & I. E. E., which is a short link in the line to Cin-
cinnati, sees fit to tell the Cincinnati shipper " You ship by my
route instead of by the Baltimore & Ohio, and I will pay you
back tea cents a hundred;" that is an arrangement the New
York Central knows nothing about, and cannot prevent in any
possible way ; that is a private arrangement.

Q. But that does not often occur ? A. That is the great
difficulty we have in carrying out our scheme of maintaining
rates ; we have constantly to fight these western roads to stop
that very thing.

Q. The extent to which these fast freight lines may do ad-
ditional cuttings, by the way of underweighing or false classi-
fications, can scarcely be known? A. Yes, sir; it is not the
fast freight lines altogether that do that ; the fact is they
need not be a party to it ; it is the shippers that do that ; it is
scarcely known ; if you substitute for the fast freight lines the
shipper, I would say that it is enormous the cheating that is
done by shippers in that way.

Q. And also by the fast freight lines themselves ? A. No; that
is just in the nature of cutting rates, and they are not, of course,
allowed to make themselves a party to it ; of course they may
do it, but it is not done to a great extent.

Q. Why shouldn't they do it, just as much as secretly
under-cutting the rate by a rebate ; will you tell me the
moral distinction between allowing an under rate and cutting
the rate by a rebate ? A. There is no moral distinction at all.

Q. Why should tiiey not do one as well as the other? A.
They may do it, and it is being done ; the practice between
railroad agents is not in that direction ; they prefer to do
another way wherever thfiy can, and it is such a dangerous
thing that the railroad companies are very much opposed
to entering into that system ; the other is easier to be done,
and it answers all the purposes.

623

By Mr. tiOOMis :

Q. I want to ask .whether the fast freight lines, as such,
handle any of the goods so that they could understate the
weight? A. No ; they would have to do it in connivance with
the agents of the railroads themselves ; they could not do it
themselves at all, because they do not handle the freight ;
they do not weigh it ; it has to be done in connivance with
the railroad agent.

By Mr. Sterne :

Q. You did not answer my question, whether it is an ascer-
tainable fact how much underweighing is being done? A.
That is an ascertainable fact in some cases ; in conversation
with a railroad man in Chicago the other day, he told me they
had weighed, I think, for one or two months, all their cars, and
have now adopted a system by which they weigh every car
that comes in their yard, and they found, I suppose, that they
were cheated to the extent of some fifty per cent, iu weights by
the lumber dealers ; there were no fast freight lines on that
road ; the road only went from Chicago to Kansas City ; and
they have now established in order to avoid that a system of
weighing every car and additional charges made.

Q. Now, the fast freight lines, the existence of which you
have explained, are co-operative fast freight lines ; now, what
do you think of the evil of non-co operative fast freight lines ?
A. As far as the public is concerned there is no difference in
serving the public ; the difference is simj^ly one of manage-
ment in the road ; it may be more of less.

Q. And the stockholders? A. And the stockholders, I
believe.

Q. Don't you think the.jDublic have some interest in pro-
tecting the rights of stockholders ? A. I think the stockhold-
ers must protect themselves ; I suppose they have a right to
protect themselves ; it is a question for the stockholders ; they
ought to protect themselves.

Q. Isn't it a pror^er inquiry for a legislative body, according
to your opinion, to find out whether the stockholders are
under existing laws properly protected ? A. I really don't
know that that is one of the objects of your investigation.

Q. Generally would not that be a proper object of inquiry?

624

you say the public has no concern in that ? A. The general
public has not.

Q. You mean the shipping public ? A. Yes, sir ; the com-
mercial public.

Q. Now, that is also an evil that has grown up, the non-co-
operative fast freight line ? A. Weli, it has been a great ad-
vantage to the public, as the fast freight lines have been and
are ; the public have been greatly the gainers by those.

Q. How, by cutting the rales ? A. No ; that has been a dis-
advantage I think to the public, but by affording facilities for
shipment that they otherwise could not have had ; the fast
freight lines were organized, if I recollect, purely with the view
of carrying on the through shipments of freights.

Q. Without bre:iking bulk ? A. Without breaking bulk,
and without a shipper having to do with a half dozen different
railroads each independent of the other, shipping from one to
the other ; the fast freight line steps in and. organizes all these
roads into one line and the shipper has only to do with the
representative of the fa«t freight line ; he has to deal with one
person, instead of having to deal with a great lot of persons ;
that one person attends to the business whenever any goods are
lost or miscarried ; he applies to that one person, =^who settles
for the damages iastead of having to look for damages to the
different roads, and so far the fast freight lines have been of
the greatest service to the commercial public in that respect.

Q. Don't shipping receipts, of fast freight lines, stipulate
that in case of loss or damage only the corporation upon whose
line the loss or damage occurs shall be liable ? A. It does not
make any difference about the shipping receipt, the law holds
the party responsible.

Q. You do i:ot answer my question fairly. A. Some of the
shipping receipts stipulate that, others do not.

Q. Very well ; that is an answer to my question ; don't they
in the main so stipulate ? A. Well, I don't know ; I have not
seen them all.

Q. But you are familiar with them? A. Yes, sir; a great
many stipulate so; that has been carried on from a great many
of those old forms that were not used, that have become use-
less really ; I suppose at one time that was the case ; ten or
fifteen years ago, I remember that was expressly the stipula-
tion with the railroad company, at least on the Louisville &

525

Nashville Eailroad ; they carried their goods to Nashville,
and did not have anything further to do with them ; they did
not hold themselves responsible, but really I don't know whether
the fast freight lines make any issue on that point with the ship-
pers ; they always assume the settlement of losses and dam-
ages, no matter where they occur, for the lino ; I think that is
the general practice ; although that clause may be in some of
the bills of lading I don't think it is ever acted upon.

Q. If the loss is settled voluntarily you mean ? A. Yes, sir ;
if the loss is settled voluntarily.

Q. "Without recourse to law ? A. Yes, sir ; if you ask me
as an expert, I consider that clause entirely useless in the bill
of lading ; it has no bearing ; it might just as well be left out.

Q. I did not ask you as an expert as to law, although I have
greiit respect for your opinion. A. Very well ; that has a
bearing on railroad business.

Q. Do you think the rates are maintained now on west-
bound traffic? A. Yes, sir; substnntially they are; there
may be some isolated cases.

Q. Don't you think the fast freight lines cut rates now ? A.
No ; I don't think they do ; there are very rigorous measures
taken with them not to do it, and I think they are carried out
for the first time.

Q. In consequence of that the rates are higher than they
would otherwise be ? A. The rates are higher than if they
would be cut, of course, always ; but the rates are not higher
than they otherwise would be if the rates were maintained
without any such arrangements ; the tariff at present is a3 low
as the tarift' before there was any such arrangement as that.

Q. The cost of transportation, you have said, has decreased
from 30 to 60 per cent. ? A. Yes, sir ; since 1864, and so has
the tariff.

Q. Therefore, to-daj' the tariff, relatively speaking is not as
high as it was in 1864 ? A. No ; I think not.

Q. Or 1870 ? A. No ; I think the tariffs are much lower.

Q. Relatively, I mean ? A. Yes, sir.

Q. Is it 50 per cent, lower to-day than in 1870 ? On the

eastbound business, I think it is much lower than 50 per cent.

Q. Is the tariff on westbound traffic 50 per cent, lower to-
day than in 1870? A. I have not the tariffs for the different
years with me ; I have, I believe, a statement at home ; perhaps

S26

Mr. Rutter and Mr. Blanchard can answer that question; I
remember not loDg ago the tariif was $1.60 to Chicago; how
long ago was that ? what was the tariff in 1874 and 1873 ; do
you remember ?

Mr. EuTTEE — In 1874 it was a dollar.

Q. How much is it now ? A. Seventy-five cents ; in 1872 it
had been reduced oue-half ; fifty per cent.

Q. That is about the reduction in the cost of transportation?
A. Yes, sir.

Q. Therefore I am right then in saying, that relatively, the
tariff is about the same as in 1872 ? A. No ; one-half.

Q. Relative to the cost ? A. Oh, yes, sir ; relatively.

Q. Now, when the tariff was the rate that jou have heard
mentioned, that tariff you have already told us was not main-
tained ? A. It might have been maintained for a short time.

Q. Then it was cut V A. It was not maintained as it is now.

Q. It was cut by everybody in every direction ? A. Yes, sir ;
as a general rule.

Q. Now, do you think that stability and openness of tariff,
and absence of secrecy, is of such advantage that the increase
of tariff does not operate injuriously ? A. I must correct you ;
there is no increase of tariff; the tariff is fixed, and the tariff
is now maintained ; there is such a thing as the reduction of
the tariff by cutting rates, but the tariff is fixed regardless of
these arrangements.

Q. But a tariff that is not obeyed by anybody is no tariff at
all ? A. No ; it is a tariff, but it is not obeyed.

Q. Would it not be a mere nominal tariff; is any attention
paid to it ? A. There is some attention paid to it, but they
cut under it.

Q. Now are not those cuts under it so numerous and so
general in the absence of a pooling arrangement, that substan-
tially it may be said to abrogate the tariff ? A. Not altogether ;
there is a show of keeping up the tariff for a long time ; a few
people get advantages and others have to pay the tariff; there
is no settled rule by which these things go, but that is often
the case ; then again the tariff is thrown overboard altogether,
and then everybody makes his own rates ; that is in the fight.

Q. Now, a fair illustration is afforded in recent times by east-
bound traffic, isn't it, as to the condition of things that arises
from the absence of a pool ? A. Yes, sir, from a want of main-

527

taining the tariff; a tariff may be maintained without pooling;
it might be.

Q. A tariff cannot be maintained ? A. That has been the
experience we have had.

Q. When the tariff is not maintained there is practically no
tariff at all ? A. When the tariff is thrown overboard entirely
tliere is no tariff at all, but I stated there are times when the
tariff is observed to a certain degree, and undercuts are made
only to part vi the shippers.

Q. That you consider a bad condition of things '? A. I cer-
tainly do.

Q. And you believe that the advantages to the community,
of cheapness of traffiT arising from this railroad war is paid too
dearly for by the secrecy of rate and this system of cutting ?
A. I consider all cutting of rates under the regular tariff is a
great disadvantage to the public.

Q. A greater disadvantage than having the tariff doubled
up ? A. Much greater.

Q. What is the point ; what point is there where you would
say the community is paying too much in rates for publicity
and for certainty of tariff? A. I say that the tariffs are al-
ways made with a view of being just, reasonable and proper
for the community, and that to maintain such taiiff is of great
advantage to the public ; that no advantage of cutting the
rates — there are some advantages to some shippers —compen-
sates for the destroying of the established tariff, when it is
based, as it always is 1 believe, on reasonable grounds and
proper principles.

Q. Do you mean that every tariff that has ever been made
by every railroad in the United States has been based on
reasonable grounds ? A. I have not seen every tariff, but I can
speak of the tariffs I have seen, especially westbound tariffs?

Q. You mean through tariffs ? A. Yes, sir.

Q. Then your remark as to the reasonableness of the tariffs
applies to through tariff? A. Particularly, yes, sir.

Q. You don't mean to apply your remarks to the local
tariffs of every railway ? A. No ; because I have not ex-
amined the tariffs.

Q. They may or may not be so ? A. Yes, sir.

Q. You have not answered my question, Mr. Fink ; at what
point is it where the community may be paying too much for

528

openness of rate and certainty of rate? A. I believe I can
answer that question ; I consider any reasonable tariff; but of
course I cannot say whether a tariff is reasonable or not, until
you show it to me ; I say it is the general practice of railroad
companies to make reasonable tarifls.

Q. Through rates ? A. I am speaking of the general tariff
of a company now, not of purely local tariffs ; I speak of com-
petitive tariffs ; that it is the practice of these railroad com-
panies not to make any unreasonable charges, and this being
the quality of the tariff" that you speak of, I say there is no
reduction made to the public which can compensate for the
disturbance of that tariff'; it being reasonable in itself, of
course any reduction that is made is unreasonable ; you might
say — might argue that way.

Q. Will you explain to the Committee why these through
tariffs are reasonable ; are they based on the cost of trans-
yjortation? A. No ; they are based on the competitive forces
that prevail in the country to fix them ; they are not arbitrarily
fixed, because they are controlled altogether by forces that
keep them down to a proper level ; it is utterly impossible at
this present da,j to make an unreasonable competitive tariff
in this country.

Q. You mean unre isonably high? A. Yes, sir; because
the competitive influences are so strong that they limit rail-
road managers in making their tariffs to a fair and equitable
basis, and this being the case, I mean that all cutting is un-
necessary, and a disadvantage to the public _ and to the rail-
ways.

Q. Would that be true when there are railroads alone to a
particular centre where there is no water transportation? A.
The water transportation of this country affects every com-
petitive railroad tariff in the country, although there is no
lake or canal to St. Louis as there is to Chicago.

Q. You have water transportation to St. Louis ? A. Water
transportation.

Q. Where there is no water transportation to a particular
point, and railway transportation alone — when combination
takes place, competiti(m ceases, does it not ? A. No, sir ; not
that sort of competition ; that is altogether a wrong idea that
has to be corrected, as has been so often stated,

529

By Mr. LooMis :

Q. Take Colunibus, Ohio? A. Yes, sir ; take any interior
cities ; I was going to explain that to you ; the water compe-
tition controls all the rates in the interior of the country from
Lake Erie, from Canada, down to the Gulf ; that is a fact that
the public is not generally aware of; they cry out a good deal
against extortion and unreasonable rates, but there is no rate
made to Chicago that don't affect, you may say, Savannah and
Atlanta, Nashville, and all those points more or less ; the simple
rule upon which tariffs are established, which you are aware of,
you stated it a little while ago, is that when a rate is made to
Chicago, which is the unit, whether it is reduced or increased,
the rates to all interior points are made to suit the Chicago
rates ; to Columbus, Louisville, Cincinnati, &o.

By Mr. Sterne :

Q. Tou mean the interior competitive points ? A. Competi-
tion to every point ; not only to competitive points, but most
of the railroads in the west change their local rates with the
competition rates to a certain extent ; they have to ; that is one
of the other principles that is so very little understood by the
public at large ; they generally think that the railroad companies
have it all their own way ; that they can do what they please
to influence the tariff to extort as much as they please, when
the fact is the railroad managers have mighty little to do with
controlling rates and making tariffs ; in fact, they have noth-
ing to do with it, except to a very small extent ; no railroad
president in this country controls the rates over his road at
all ; it is controlled by other forces and influences to which he
has simply to conform.

Q. You are speaking now of competitive rates ? A. I speak
always of competitive rates, but I always wish you to under-
stand that the local rates of the road are influenced by the
competitive rates.

Q, Now, don't say that as a fact, because we have, as a fact,
the other thing ? A. I say it, sir, as a fact, because, I know it
is done ; there may be ca^es where it is not done ; but I say,
as a rule, it is done ; I always did so when I was a manager
of the road ; I know a great man^' roads that do it, and I think,
in many cases, they are obliged to do it ; there may be other
cases where it is done ; I have no doubt, in Illinois and
55

5B0

Indiana, one of the great complaints of the people that led to
the Granger legislation, was tliat it was not done, but every
railroad mannger now recognizes the fact that the local rates
must conform, in a measure, to the competitive rates, and
most roads, I believe, carry out that principle.

Q. And when that is not done, great injustice results? A.
Then it leads to these great differences in rates between local
and through, when the through rates are very low ; the fault
is with the low through rates you complain of.

Q. Don't say what Z ought to do, or what / ought to com-
plain of ? A. I didn't say anything of the sort ; I simply give
the reason why discrimination ensues from the difference in
the rates, and how that arises, and how it can be remedied.

Q. And one of these remedies is to increase the through
rate ? A. Yes, sir ; that is the principal remedy, I think.

By the Chairman :

Q. I did not understand what you said in relation to the
water route from hereto Chicago affecting these rates? A. Yes,
sir ; I will try to explain that to you, because that is a very im-
portant factor in this question ; the tariff made by the trunk
line here is based upon the Chicago rate as a unit ; the distance
from Chicago is 96?) miles ; the distance to St. Louis is 1,117
miles, say ; whenever the rate is changed to Chicago, on ac-
count of the lake competition, which you know is very wild
often, the rate to Chicago — if the railroads want to do any
business — has then to conform to the lake and canal rates ;
having done that, the roads to St. Louis make the same and
similar reduction in proportion to the business ; they do not
keep up the rates in schedules to the old standard before the
reduction was made on account of the water competition, but
they lower them in just the same proportion ; so they do even at
Louisville and Cincinnati, roads that cannot be reached at all
by water from here, but they all drop down in proportion

Q. Let me interrupt you ; there would be the same pro rata
and reduction Irom Chicago to St. Louis that there would be
from New York to Chicago? A. Yes, sir; and that reduction
is occasioned by the lake competition, and it don't stop at
Louisville, it tends to Nashville and Savannah ; It tends to
every point of the country I might say ; to-day when they
charge ten cents or twelve cents a hundred from Chicago to

531

New York; the steamship lines from here to Savarniahtake up
that freight and carry it for fifteen cents from here to Savan-
nah, making a rate from Chicago to Savannah of twenty-five
cents ; the regular rate from Chicago to Savannah by raih-oads
may be at the time 50, 60, 70 or 80 cents ; they have to come
down and conform to the water rate ; the rate in Savannah
determines again the rate in Atlanta ; Atlanta is perhaps the
most interior of all towns in the country, and generally gets
the highest rates on that account; they carry their freight for
nothing, from Chicago to New York almost, and then from here
by water to Savannah, and thea they carry the short distance
from Savannah up to Atlanta themselves — that is 200 miles — ■
and the other rail lines that work from Chicago to Nashville,
Louisville, Chattanooga and Atlanta have simply to conform
to the rates that the steamship lines and the rail lines from
Chicago and New York make ; thus the lake navigation and
canal navigation regulates the rates of the whole country, you
may say, from Canada down to the Gulf.

Q. That makes it a pretty important factor ? A. That is a
very important factor, and one that is not thought of, yet
that is as important as anything can be ; and people have secu-
rity and full protection against any extortion in the ratos on
the part of the railroad's.

By Mr. Stbkne :

Q. As to through points ? A. As I said before — I wish to
conclude this — as I said before, all these rates influence the
question of local rates ; for example, when we have to carry
freight to Savannah, in order to compete with the outside
route and the New York route with Louisville and Savannah,
we have to make the rate's very low — thirty or forty cents,
whatever it may be ; now, we cannot very well keep up the
rate to Atlanta very much higher than we carry to Savan-
nah ; if we do, the Atlanta people make a great fuss about it ;
so the interior point of Atlanta is very much benefited by the
lake and canal of New York; on the other hand, the steamship
lines that run from New York tu New Orleans carry freight to
New Orleans, and from New Orleans it is brought to Mobile,
and from Mobile to Montgomery, and from Montgomery to
Atlanta ; there you have water lines all the way from New

532

York to New Orleans, and back again to the country; and that
has to be met again by the interior lines, say iiom Louisville to
Atlanta, and so one tariff and one rate depends upon the
other ; there is at present a perfect system of arrangement in
these rates ; there is no difficulty in making a just and equitable
tariff for the whole country ; in fact they are made ; there is no
complaint on the part of the merchants in regard to the
rates ; I don't think there is ; and the only difficulty that
arises is this miserable fighting between the railroads them-
selves in cutting and slashing against each other, and destroy-
ing those well established and regulated tariffs ; now, all that
has to be done to correct that is to take some means to
maintain the tariffs as they are now established.

By the Chairman :

Q. By a law ? A. By a law, yes ; and if you pass a law in
New York State it cannot reach it ; if Congress will pass a
law when railroad companies come together to make a tariff
and that tariff is a proper one and right tariff, and then enforce
that as the law of the land, I think all our difficulties will be
over, and before you do it our difficulties will not be over ; by
co-operative action between the railroad companies we endeav-
ored to bring about that result, without the interference and
authority of a law, because it is a very hard job.

By Mr. Steene :

Q. You don't think, for instance, that a law of Congress
could establish a rate what the New York Central should charge
between Syracuse and Utica, do you ? A. No ; I don't think
they could.

Q. Therefore the remedy you suggest would be utterly inop-
erative ? A. I am speaking of the general business of the
country; you are aware that I am not at all acquainted with
the local conditions of this country, and local traffic, and you
need not ask me any questions about it, because I don't know
anything about it.

Q. We are considering some of the questions that concern
the State of New York ? A. Let me interrupt you ; this is a
question that concerns the State of New York ; you must look
beyond New York in order to apply the remedy to the diffi-
culties that exist in the State of New York.

538

Q. We have, tliougli, some little concern, of course, with the
conditions of the interior of New York State ; now, the remedy
that you suggest — this general scheme of railway administra-
tion, as you look at it, resulting, as you think necessarily in
railway combinations of the closest possible character — to
maintain rates, which system you believe ought to be extended
so as to embrace all the railways of the country practically into
one great corporation of corporations ? A. Oh, no ; allow me
to correct you here.

Q. Don't let us have a discussion about it — into one great
combination ; am I correct in saying that ? A. Well, " com-
bination" is, perhaps, a strong word; "confederation" you
might use, or you might sayj " one great co-operative so-
ciety."

Q. Combining them into one great co-operative society, fix-
ing tariffs for through points would, you think, be a remedy
for the existing evils of cutting rates and secrecy of rates if
the law would enforce that condition of things ? A. You would
have overcome the principal difficulty.

Q. Now, assuming that all that could be done, you still have
the difficulties which arise from the local discriminations, and
the local secrecy, and the local evils, which in their nature are
about the same in a smaller degree as the evils that extend
and spread over the whole country ? A. You still have to deal
with them ; the Federal Government, I understand, cannot deal
with them, and there is one of the difficulties of the whole
problem.

Q. Now, simply confine yourself to my questions and we
will get along charmingly ; this local difficulty ought therefore,
according to your opinion, to be represented by a local law
quite as much as this general difficulty ought to be represented
by United States law ? A. That is, as I was going to remark,
the difficulty of the problem.

Q. Isn't it a logical conclusion ? A. The Constitution of
the United States unfortunately, or fortunately, I don't know
which, does not permit them to go into States, and the States
cannot go beyond themselves, and I do not know that you
can reach it, as the Constitution of the United States now
stands, as I read it ; of course I am not a lawyer, as you pro-
perly remarked ; I do not see that it will reach the subject
completely ; it is very doubtful in my mind.

534

Q. One of the steps towards the solution of this problem
has been made, has it not, by the appointment in several of
the States of Commissioners of Eailways, who, with more or
less ability, and more or less attention to the subject, give the
railway problem within their State attention, and recommend
to the Legislature from time to time what should be done? A.
There is a certain progress ; as far as those Commissioners have
studied the question, and made themselves familiar with the
difficulties of it, and disseminated information on the subject,
they have done a very good work.

Q. For instance, take the Railway Commission in the State
of Massachusetts ; don't you believe that has resulted in excel-
lent work ? A. Excellent work ; allow me to say that here, as
in everything else, everything depends upon the Commis-
sioners.

Q. Everything depends in this State upon the character of
the Legislature ? A. It might be just as likely that a Com-
missioner would be appointed who would do as much harm as
good.

Q. Do you know of any instance where that is the case ?
A. I have not followed the subject completely ; I know very
little about it.

Q. You have given us a case where a Commission has
done good ; do j'ou know of any case where a Commission
has done harm ? A. I am not familiar with what they have
done in the various States excepting Massachusetts, where
they have done good.

Q. Now these various Commissions, spread through the
various States, have met in Congress recently at Saratoga, and
don't you think the interchange by public officers of views on
the subject for the guidance of legislative bodies is one of
the methods of arriving at a solution of this problem ? A.
Yes, sir ; and informing themselves on the subject.

Q. And informing the Legislature ? A. Yes, sir.

Q. You know ho w our American Legislatures are constituted ;
that they are generally bodies coming together for but one year
and having great pressure of business upon their various
standing comnaittees ; you do not believe them to be organized
to deal with so important a problem ? A. No, the less they
have to do with it the better.

Q. In the organization that they have ? A. Yes, sir.

535

Q. Therefore they are scarcely competent to deal with it,
except through the instrumentality of Commission ? A. Except
through experts.

Q. And these experts should not entirely be Commissioners
of Railways, but they should also be Commissioners for the
public? A They should understand ttieir business thoroughly.

Q. But they should be Commissioners who take the public
views? A. They should understand their business.

Q. Should not they be Commissioners who, having the
knowledge of a railway exjiert, should also take the public view
of the situation? A. Most certainly.

Q. Under those circumstances, you believe that a railway
commission, if it be properly constituted, would be one of the
steps towards a solution of the question ? A. Yes, sir ; yet
State Commissioners would be of very little value except the
General Government takes the matter in hand.

Q. For the general purpose ? A. For the general purpose.

Q. But, for instance, to the extent of the evils of cutting
rates, secrecy of rates, etc., which develop themselves in these
railway wars and a general mob, as you call it, of railway ad-
ministration throughout the United States which make them-
selves apparent within the States, why, as the United States
Government is not competent to deal with that subject, the
States must to a greater or less extent deal with it? A.
They cannot deal with it separately ; they ought to deal with
it at the same time, in order to do any good.

Q. Now, you are thinking again of a through traffic ; I don't
see why they cannot deal as to the rate between Utica and
Syracuse, or why they cannot deal with this subject ; that
there should be no secret rate ; that if the railway chooses to
regard Mr. Fink's rule as the right one, that the unit should be
the car load, and that the smaller man should be charged
simply as much more as it costs to handle his goods, why, they
should make a rate and stick to it ; and not make one rate to
one man and another to another, and pledge one man to secrecy
and another man to secrecy, and give secret rates to both,
while each man imagines he cheats the other ; the States can
'do that, cannot they? A. Not very v/ell.

Q. Why ? A. Because, take the case of any point where
the Erie Railroad competes with the New York Central

536

Q. (Interrupting.) No ; I propose now to take a single
point wlieie there is no competition ; why cannot the State
deal with such a point as that and say, whatever your rate
shall be — we don't yiropose to make it for you — it shall not be
a discriminating one, and it shall be an open one ; and it shall
make a unit of a oar load it you please, based upon the cost
of transportation, or whatever basis you want to put it on,
and that the smaller shippers shall be charged only so much
more as it costs to handle their goods ; where is the difificulty
in dealing with that in that way? A. Simply this : that you
cannot deal with isolated places where there is no competition ;
you have to deal with all places on the line of the road ; a
tariff has to be formed ; there is hardly any road in the
country — perhaps there may be some roads — where you can
make such a tariff and stick to it ; one that don't come into
contact with any other road ; on a branch road you can make
your tariff on the proper principle, charging according to dis-
tance, if you choose ; but when you come to a road of any
length that is crossed by other roads, the tariff, if it is properly
made, should conform to the competitive points on that road.
Q. That would be an additional limitation to be taken into
consideration? A. Yes, sir ; now that competitive point may

be controlled by another road outside of the State

Q. (Interrupting.) Oh, no, no road outside of the State — one
moment ; let me correct you there ; no road outside of the
State could run to a place wiihin the State without conforming
to tj]e law of the State; Pennsylvania, for instance, could
not charter a railway which would be permitted to make rates
for Syracuse, even if it would reach Syracuse, without con-
forming to the laws of New York on that point? A. I said
before that I was a strict constructionist, and when you come
to draw State lines, that road may run four or five miles in
this State, and two or three hundred miles in another State,
and the question is, do you control that road in the other
States ?

■Q. We don't propose to in the other States? A. Allow me
now to show you how it influences the road in your State ;
take Rochester or any other point — I am not familiar with"
your local competition — there is a road running in there from
Indiana, running about ten miles in your State, and here is
the New York Central running the whole length of the line to

537

Bochester ; now, you establish a tariff to Eochester ; now there
comes an imaginary road that runs

Q. (Interrupting.) I don't want to take any imaginary road?

Mr. Blanchard — The Erie Eailroad runs from New York to*
Waverly, where it competes with the Lehigh Valley Road,
running entirely through Pennsylvania except about five miles
beyond the Pennsylvania State line to Waverly ; now, if the
Legislature was to make a fixed charge from New York to
Waverly, and the Lehigh Valley Road with only five miles in
the State of New York — will you illustrate that? A, That is
the illustration I wisheil to make, that is the very point I wished
to consider,

Q. Cannot the Legislature take that into consideration in
fixing the maximum rate ; allowing railroad companies, where
they have competition from other States as to a particular
local point, to go below that maximum point for the purpose
of meeting that competition ? A. They may change every
day, every five minutes, and it influences the whole tariff of
the road.

Q. Wouldn't, for instance, the question as to whether the
difference of the tariff should be allowed, be a proper subject
of discussion with public Commissioners? A. Then you have
to leave it again to the discretion of the railroad.

Q. I don't mean railway Commissioners like yourself, ap-
pointed by the railroad, but railway Commissioners appointed
by the public ; that, upon questions of discrimination as to
tariff, the general public shall bave the right to say where ^dis-
crimination shall end, and what it shall be, so that, practically,
the public shall sit at your board with you, through the
instrumentality of some public otficer, to deteimine public
rates which shall affect the public, so as not to leave it to the
discretion of the railway companies as to what is public
policy or not ; does that sound unfair to you ? A. Not at
all, if they understand their business ; I should be very glad to
have that sort of assistance, if it is practical to carry it out ;
the principles that govern this thing can be laid down, and the
railway companies can be held responsible for any violation
of them ; that brings about the same result ; let them make
their own tariffs.

Q. There is no insuperable difficulty in dealing with the sub-
56

538

ject in the way Massachusetts has dealt with it ? A. They have
never dealt with those details.

Q. Indeed they have ; for instance, the Eailway Commis-
' sioners prescribed a uniform system for keeping railway ac-
counts ? A. Yes ; but I mean that they have never fixed any
tariffs.

Q. We are talking of a different thing ; none of us here, I
believe, dream of enforcing a pro rata freight bill to competi-
tive points, fixing an arbitrary tariff; therefore, you are fight-
ing an enemy in the air when you are directing your remarks
to that ? A. You suggested the subject.

Q. No ; I never suggested tlie subject of pro rata railway
charges V A. Neither did I, only a fixed tariff ; I only wanted
to show you that it was impossible for the Government or any-
body to make a fixed tariff in a State where you have con-
stantly to conform to competitive influences from other States,
which you do not control.

Q. Don't you know, as a matter of fact, that that is done by
all the Governments of Europe, although there are these
competitive forces in existence, except in England ; that
France makes a fixed taiiff ; that Germany makes a fixed tar-
iff"; that Switzerland makes a fixed tariff', and that South
Germany doey? A. Yes, sir; but where is the competition
that we have here ; the result of unfixed tariffs is com-
petition ; if you can fix the tariff for the whole country you
can overcome this whole difficulty ; the difficulty that yon
labor under, and that is the point I think you are now inves-
tigating, is whether the State could tix the tariff; befoie the
German Empire took this great question in hand they had all
the difficulties we have in hnnd, and they still have them.

Q. They have a fixed tariff of charges, as I have discovered
in all European countries, by which it is impossible to charge
for a shorter distance more than for a longer distance ? A.
Perhaps that is not so ; they have this differential tariff, you
remember, about which there is a good deal of discussion now
in the German railway papers, involving the same questions
that we have here to deal with.

Q. But doesn't that arise A. (Interrupting) It arises

from competition with other countries.

Q. From the competition with other countries for the East

India trade ? A. Precisely ; here you have competition witll
other States.

Q. But in Germa,ny they have not dreamed of having
condition of affairs in which a locality further distant could be
charged less rate than a locality nearer to a particular centre?
A. That principle can be established and carried out, and I
think that is carried out on most roads.

Q. We are getting away from an answer to the question ;
now, they are considering in Germany and in France the ques-
tion of modifying their tariff to meet the international compe-
tition for" the East India trade which has developed through
the Suez Canal? A. Yes, sir.

Q. And particularly the East India trade that centres at
Brindisi? A. Yes, sir.

Q. Have you ever entered into any computation as to

whether these pooling rates A. (Interrupting.) We have

no pooling rates now.

Q. But that is technical ? A. No, sir ; pooling rates have
nothing to do with the matter.

Q. Have you ever entered into any computation for the pur-
pose of ascertaining whether the rates now charged from
Chicago as a centre — from the seaport — are or are not remu-
nerative to railways? A. From the seaboard to Chicago?

Q. Yes ? A. Oh, yes ; they are remunerative ; by that I
mean that they yield a net profit.

Q. Over the cost of transportation ? A. Yes, sir.

By Mr. Bakee :

Q. These Exhibits 1 and 2 of to-day, are the copies of the
contract under which you act as Commissioner ; I desire to
asii you if there have been any modifications made of either
of those contracts ? A. The contract in regard to the division
of traffic has not been modified, except tliat it has been
extended ; it has been fixed for five years, and will continue

for five years from January first ; the other contract 1 don't

know that it has beeu modified, and it is not aliogether acted
upon in some particulars ; Mr. Blanchard, perhaps, could tell
you ; I could not tell you exactly in what particulars, but in
regard to the rates ; the difference in rates between the differ-
ent seaboard cities is still in force ; there are some other pro-
visions about not billing any foreign freight through.

Q. Are the modifications in writing ? A. No ; I suppose
there are none ; there is a provision in here that no through
bills of lading shall be given ; that has not been lived up to ;
whether that is a modification made in writing or a verbal
agreement I don't know.

Mr. Blanchaed— I think Mr. Eink has acted as chairman of
several meetings at which the detail has been agreed upon, in
order to carry out the main principle in that general paper,
I had intended, in his cross-examination, to ask him to produce
those to show the detail and the ditficullies that they have met
and the determination of the different companies .to carry
them out ; will you produce that ? A. I will produce that.

Q. Let rue call jour attention to this new table of percent-
ages for computing rates on eastbound freight, published in
to-day's Railway Gazett' ; is that the agreement or arrange-
ment of percentages which have been agreed upon ? A. That
has been agreed upon, to take effect next Monday.

Table of percentages for computing rates on eastbound
freights received in evidence and marked " Exhibit 7, June 20>
1879."

Q. If you say that it is right, that a man who ships a large
quantity of goods should receive the same sort of advantage
arising from the reduced cost of handling he large quantities
of goods, as compared with the small quantities, why isn't that
true as to the cities as a whole ? In other words, why, with
New York giving its roads five times the traffic, that Philadel-
phia, Baltimore, and Boston does, why should it not get the
advantage of the bulk of that tratfic ? A. Because we do not
control it, simpl}' because we can not do it ; I had better ex-
plain : the cost of transportation, as I have said before, is not
the only element of making rates ; the policy of the Pennsyl-
vania Baiiroad Co. influences the policy of the New York Cen-
tral, and the New York Central can do nothing that they want
to do and ought to do, except they do it in conference with the
other roads that influence the traffic from this city ; every rail-
road business is a co-operative business run as a corporation
must be run ; you have no control of jour own road ; every-
body else controls your road just as much as you do yourself.

Q. For instance, suppose the Pennsylvania Eoad chooses to

641

make a rate, say of seventy-five cents per hundied from Phila-
delphia to Chicago, why can't the New York Central make a
rate of sixty cents to Chicago, which would make it accessible
to everybody ? A. Because when the New York Central makes
a rate of sixty cents the Pennsylvania makes one of fifty.

Q. Then the New York Central comes down to forty ? A.
Yes, sir ; it comes down to forty and then you come down to
those low, unremunerative rates such as you have had.

Q. Wait a moment ; cannot the road that does twice the
business do its business so much cheaper than the road
that does less business that it can drive the weaker road
to the wall ? A. It depends upon the relative strength of the
two roads ; there may be roads that you can drive to the wall
and there may be other roads that you cannot drive to the
wall, and that kind object, and jou get to the wall before
they do.

Q. That depends a little upon your stock capital ? A. It
depends upon the particular conditions, including the cost of
operation.

Q. The stock account, and loans, and naturally advantages?
A. Yes, sir, and credit and everything else.

Q. Grade ? A. That enters in as a matter of cost of trans-
portation.

Q. Bulk of trafiic. A. Not upon great trunk roads.

Examination suspended until to-morrow.

(Recess.)

Elmote 11. Walker sworn.
By Mr. Steene :

Q. What is your occupation ? A. I am at present Statis-
tician of the New York Produce Exchange.

Q. How long have you held that position ? A. Nearly ten
years.

Q. What was your occupation anterior to ten years ago ?
A. I was connected for ten years or more with the commerce
of the lakes and canals.

Q. Of this State ? A. Yes, sir.

Q. How long were you connected with that ? A. About ten
years with the commerce of the canals ; some years before

o4§

ihai I was in the old Buffalo and Attica Eailroad oifice as as'
sistant receiver, and at that time, besides attending to these
duties, I checked out all the freight that came to Buffalo des-
tined for that city, and going west that came by the Central
Eoad ; or by the Buffalo and Attica link of what subsequently
became the Central Road.

Q. You are, therefore, familiar with the trade on the lakes
and canals of the State of New York, and on the railways of
this State ? A. I have been more acquainted with the trade
on the lakes and canals than the railways, practically.

Q. You have made the collection of statistics in relation to
the trade and commerce of New York a profession, have you
not '? A. That is my profession ; with regard to many articles ;
of course, not of all articles ; I have kept statistics of such
articles as are dealt in by the members of the Produce Ex-
change.

Q. Have you any statistics of the trade of 1863 in those
articles ? A. Yes, sir ; we have of lfc6c!, but that is before I
came here ; I have the statistics that I made up for the Buffalo
Board of Trade ; I made up statistics of the movement of
grain, more particularly, at the seaboard ports.

Q. When did you commence keeping the tables of the re-
ceipts of grain and ilour at the seven seaports ? A. I think
at the seven seaports, where I tabulated them in form ; I think
it was in 1871 ; that is my impression now from recollection.

Q. Have you those tables with you now ? A. I had the fig-
ures not in tabular form for years previous, but I did tot com-
mence keeping them in systematic manner — giving the re-
ceipts for each week, from the first of January or from the
first of September, until about 1871.

Q. Have you, since 1871, and, indeed, since you have kept
note t f the receipts of grain and flour in the City of New York
noted any change in the ratio or proportion that was received
at New York as compared with the other seaports? A. I
have.

Q. Will you give the Committee the benefit of that knowl-
edge in detail? A. You want simply the ratios?

Q. Mr. Loomis asks me to ask you what book you are read-
ing ? A. This is the last published annual report of the Pro-
duce Exchange.

Q. Prepared by you ? A. Prepared by me.

543

By Mr. LoOMis :

Q. Published by whom? A. Published by the Produce
Exchange:

Q. I mean the printer ? A. Jones & Company, I think, are
the men who did it ; Jones' Steam Printing Company, 42 Broad
street.

Q. What year? A. 1879, but it is for 1878.

Q. Where can the book be had? A. At the Produce Ex-
change; I have tables prepared here of the receipt at five of
thfl principal ports.

Mr. Sterne — I presume it will, perhaps be on the whole
better— after he has identified this book — to put in evidence
just tbe pages that he refers to, without reading the figures off.

Mr. Bakee, — Let the Avitness verify the pages ; I suppose
you ask him to verify the figures.

Mr. Sterne - -Yes, sir.

Q. Proceed ? A. I have the receipts of five seaports from
1866 to 1878 ; that is page 268 ; the total receipts at New York —
that is, these five ports — includes New York, Philadelphia,
Baltimore, Montreal and Boston — the total receipts at New
York for the same years ; the total receipts at Philadelphia
for the same years ; the total receipts at Baltimore for the
same years, and the ratios for the same years; the percentage.

Q. Those are the two tables on page 268 of the book, are
they ? A. They are.

Q. Now you have made up those tables v/ith great care, have
you ? A. Made them up with the greatest cave it is possible to
make up tables.

Q. You got your returns daily ? A. Daily and weekly and
monthly ; we make them up monthly ; we maice them up in this
form (producii:g a paper).

Q. This gives the receipts of all the railways? A. Yes sir.

Q. Of all the water routes ; total by water and total by rail
and water? A. Yes, sir.

Q. Where do you get this data from? A. They are procured
from the railroads and from the canal lines.

Q. From all the sources of information in the City of New
York that are available? A. Yes, sir.

Q. How do you get your Philadelphia — also your Montreal,
Baltimore and Boston returns ? A. Those are taken from the
publip commercial reports of those several cities.

544

Q. You believe them to be accurate ? A. I believe them
to be accurate.

Mr. Stebne — I will offer in evidence page 268.

(The two tables contained on page 208 of the New York
Produce Exchange Annual Report for 1878, received in evi-
dence, and marked " Exhibit 5, June 20, 1879.")

Q. Now, what do these tables show ? A. They represeut
the receipts of all the different kinds of grain and the receipts
of flour, estimated at its equivalent in graiu, and corn meal at
its equivalent in grain.

Q. The tables on tbe following page 269, state the amount
of exports from 1873 to 1878, and the percentages, &c., of the
five leading seaports ; they have been made with the same caie
and the same sort of data? A. The Baltimore, Philadelphia
and Boston reports are made up from the weekly commercial
reports of those cities, got through the shipping list, and then
they are revised by the annual trade reports of those cities, at
the close ol the year.

Q. So that every care is taken to eliminate sources of error
or errors ? A. Yes, sii'.

Mr. Sterne — I offer these in evidence.

(The first two tables on page 269 of the Annual Report of
the Produce Exchange, received in evidence, and marked
" Exhibit 6, June 20, 1879.")

Q. Have you noticed any peculiarity in the receipts of maize
or Indian corn at the ports of Philadelphia, Baltimore,
Boston and New York, iu the year 187t5 ? A. Yes, sir ; there
has been, in 1878 and 1879 also.

Q. What is that peculiarity? A. The receipts of maize
during 1878 at the three ports, Baltimore, Philadelphia and
Boston, ai-e something over fifty-one millions of bushels — all
by rail; the receipts at New York by rail were about twelve
millions of bushels, including about two millions by the Penn-
sylvania road.

Q. How much of that was carried by the New York Cen-
tral ; do you know? A. I don't know as I can tell you heie ;
I have the amount given iu each of the monthly statements of
the receipts at New York — the amounts received of each kind

545

of grain is given by each route whicli will be found on pages
288, 289, 290 and 291 ; it is on four pages.

Q. Let me draw j-our attention to this fact ; this is in your
handwriting, is it (showing witness a paper) ? A. Yes, sir.

Q. Can you give from this memorandum in your own hand-
writing a statement of how much was delivered by the New
York Central as compared with the five other ports ? A. The
amount delivered by the two roads, including the Erie, which
is now the Lake Erie and Western, was 10,650,366 bushels.

Q. In 1878 ? A. Yes, sir.

Q. How much at the other ports ? A. The amount deliv-
ered at the other ports was 51,376,288 bushels.

Q. Did that same feature continue in 1879? A. It con-
tinued ; only there is rather a more marked difference in 1879,
owing to the very strong competition and the difference in
rates.

Q. The rates being more favorable to Baltimore ? A. The
rates are more favorable, and have been for quite a number of
years ; I think always have been ; I would state, for the informa-
tion of the Committee, that the rates originally — I think the
difference between Baltimore and New York and the competing
points in the West was at one time about $2.60 a ton, but 60
cents of that was a drawback that was paid to the receiver or
shipper of the grain when it was exported, so that they had
12.60 a ton in their favor, and Philadelphia had a rate consider-
ably less ; there was a less difference between Philadelphia
and New York than between Baltimore and New York, and as
this freight became diverted, of course the shippers from the
West would not pay a premium of $2.60 a ton for the privilege
of sending their business to New York, and when they
found — I think both of the roads centering in this city have
frequently had very strong contests in lowering freights, in
order to get this reduced or wiped out altogether, and they
have got it reduced, so that now the difference between the
rate from Chicago, Baltimore, and Chicago and New York,
is 60 cents a ton, and no drawbacks, and between Chicngo
and Philadelphia and Chicago and New York is 40 cents a
ton and no drawbacks. Most of these fights have been to se-
cure equal rates to all the shippers ; as the western shipper —
of course, if he can ship to Baltimore or New York for a dol-
57

546

lar a ton or 60 cents a ton, or whatever it may be less, why his
grain goes there.

Q. Have you noticed a considerable ratio of shipments go-
ing from New lork to other ports ; you may look at the report
where 1 have marked it ; you will find some statements in it
made by you as to diversion of trade. A. Tbeie has been a
variation in different years ; do you want me to give the ratios?

Q. Yes. A. The ratios, as I made them up myself, are

Q. (Interrupting.) What page is that? A. 268 ; this is the
receipts ; in 1866, New York had 6\^\ per cent, of the whole ;
that is of these five ports; in 1867, New York had 5o-x\ per
cent., and the other ports 44yV per cent.; in 1868, New York
had 57y"^ per cent., and the other ports 42yV per cent. ; in 1869,
New York had 55 per cent., and the other four ports 45 per
cent.; this includes Montreal ; in 1870, New York had55yVper
cent., and the other ports 4A^jy per cent.; in 1871, New York
had 57 per cent., and the other ports 43 per cent.; in 1872,
New York had 53-/^ per cent., and the other four ports 46-i^
per cent.; in 1873, New York had C2y^-g- per cent., and the other
four ports 47^%- per cent,; in 1874, New York had 55/^ per
cent., and the other four ports 44-xV per cent.; in 1875, New
York had Bi^^j per cent., and the other four ports 47y'-u per
cent.; in 1876, New York had 45yV per cent., and the other
four ports 54y^75- per cent.; in 1877, New York had 50^^-5- per
cent?; the other four ports had 49xV per cent.; in 1878, New
York had 52-i-g-^ per cent.; the other four ports 47y'u*u- percent.

Q. How much of the whole product comes by way of the
Erie Canal — of that which comes to New York ? A. I think I
have tables in there of that also.

Q. Can you show how much of the whole product that comes
to New York, comes by way of the Erie canal ? A. Of grain,
you mean?

Q. Yes ? A. On page 265 will be found a statement — I have
not given the ratios, but the bushels — on page 265 will be
found the receipts in 1878, and also 1877 and 1876 ; the total
receipts at New York of flour, corn meal, and the different
kinds of cereals — flour being estimated at its equivalent in
grain— 152,862,170 bushels-

Q. How does that compare with the rail receipts for the same
period? A. The rail receipts were 85,350,079 bushels; in
1877 the total receipts were 103,313,782, of which 50,892,967

547

came by rail ; in 1876 the total receipts were 95,949,252, of
which 59,047,953 came by rail.

Q. You have noticed, have you, a diversion of trade from
New York within the past ten years? A. There has been a
diversion that has been continued for ten years or more ;
greater in some years than in others.

Q, And although the absolute volume of traffic that came to
New York has increased, its relative proportion has decreased ?
A. Yes, sir ; it is only the ratiijs.

Q. Compared with other cities ? A. Yes, sir.

Q. Do you know of business houses that, wholly or in part,
have left the City of New York to do their grain trade at Bal-
timore and at Philadelphia? A. I know of one or two such
houses tha^ are doing business in Baltimore and have a house
also in New York, who formerly had a house exclusively in
New York.

Q. And what reason is there for that ? A. The reason that
they assigned was that the shippers frequently would favor
Baltimore on account of the prices and their location in the
West rather than New York.

Q. The rates being less ? A. Yes, sir.

Q. David Dows is one firm ? A. Yes, sir ; I believe a Mr.
Baker and a Mr. Tate that went from here ; but I think he
carries on business here as well as in Baltimore ; I don't know,
there may be others.

By Mr. LooMis :

Q. Mention the names of those you had in mind when you
made that answer ? A. I think David Dows & Company, for
one firm, and W. T. Baker, I think the name is, of another
firm ; but whether they are doing business there this year or
not, I don't know ; I know they went there and they were
doing business here to some extent at the same time ; but
whether they continued here or not I do not know.

By Mr. Stebne :

Q. Do you know anything of the course of foreign shipping
and the increase that has taken place at pori,s other than New
York, as compared with New York ? A. Yes, sir ; the per-
centage of increase has been very large ; larger at Baltimore,

548

Philadelphia — take it on the whole, it has been larger at Bal-
timore and Philadelphia than at New York, taking the ten
years together ; they had a comparatively small grain trade
while new York had a large one to commence witl;i.

Q. And now Philadelphia has a large grain trade ? A.
They receive about forty millions.

Q. How is it as to Baltimore and as to Boston ? A. Boston
barely maintained her position last year ; take the ratio be-
tween the places, considering the increased movement, and
New York rather more than maintained her position last year.

Q. But in the course of years, has not Boston gained largely
on New York? A. Boston has not gained so very much ;
Boston has gained some, but the principal ports that have
gained are Philadelphia and Baltimore.

Q. The rates from Philadelphia and Baltimore to western
points, and rates to Philadelphia and Baltimore on grain have
been less, have they? A. They have been less to both those
places for quite a number of years from western competing
points ; like Chicago and St. Louis — less than to New York.

Q. By rail ? A. Yes, sir ; all rail.

Q. And they have been less to Boston or the same ? A. I
think sometimes about the same, but I think usually a little
more to Boston; but Boston has the advantage of usually
cheaper ocean rates.

Q. And Boston and Philadeljphia have the advantage, have
they not, over New York of about the same ocean rates ? A.
The ocean rates from Baltimore, I think, taking the average
through the year, are a little larger — not very much — than the
average from New York ; I gave the average in here.

Q. Is it any larger for grain in bulk in sailing vessels ? A.
I think there is a small percentage larger average from Balti-
more than from New York.

Q. Does it represent anything like the difference in freight
charges by rail ? A. Nothing like the difference ; sometimes
the rates are the same, and sometimes there may be instances —
days — when it would be less ; of course, the competition reg-
ulates that.

Q. You speak of the ocean rates ? A. Yes, sir.

Q. Sometimes they are the same, and sometimes they may
be less ? A. Of course, it may be for a day, as all these

549

prices and rates for freight that go on rails and lakes and canals
are changing every day.

Q. Are the ocean rates from Philadelphia the same ? A.
They are about the same from Philadelpha as from New York.

Q. Now, as to rates of insiirance ; they are about the same,
are they not? A. I can't say ; I have not made myself famil-
iar with that, except I know it has usually been — and I used
to know about it ; the rates for certain months of the year
were the same from Montreal, Boston, Philadelphia and Balti-
more, but how it is now I do not know ; in the earlier months
of the year the insurance rates were larger from Montreal, and
later in the season the rates were larger from Montreal than
from other ports, but how they are now, I don't know.

Q. Do you know anything about the Lloyd rates of insur-
ance ? A. I don't know what they are.

Q. In the ocean freights, you say, the difference, if any
there be, between Baltimore and New York, is very much less
than the difference in rail rates ? A. I should think it was
considerably less, taking the average for the year.

Q. Therefore, dur ng the course of the year there would be
by the maintenance of those differences of rail rates by the
different railway corporations by agreement, a constant differ-
rence in favor of Baltimore and Philadelphia on freight run-
ning to and from Liverpool to western points? A. I don't
know about freights from Liverpool , I have not made myself
acquainted with the western movement — not latterly.

Q. How about ocean freights to Liverpool ? A. The ocean
freights to Liverpool I speak of now.

Q. They would be less irom Chicago to Liverpool by the
way of Baltimore than from Chicago to Liverpool by the way
of New York ? A. The aggregate would be less.

Q. And you say that that has noticeably changed the cur-
rent of trade ? A. It has changed the course of trade very
considerably.

Q. Is New York threatened with another divei sion of trade
through Canada by the completion of the Welland Canal? A.
The Welland Canal is now ia process of enlargement ; for qaite
a number of years — I think some 25 or 30 years — the Welland
Canal has had capacity sufficient to pass vessels of
about 450 tons measurement, carrying about 600 tons ; the
St. Lawrence canals, the locks are larger, and will admit ves-

550

sels of twice that capacity, or more ; I am informed that the
Welland Canal and the six or seven short canals around the
rapids in the St. Lawrence, between the Thousand Islands and
Montreal, are to be enlarged — the enlargement will be com-
pleted about the year 1881 — with locks of sufficient capacity
to pass vessels of about 1,500 tons ; the length of those canals
altogether is 69| miles, including 28 in the Welland ; the
others are comprised of short canals, nine or ten miles — the
Lachine, I think, is nine miles ; some of them two or three ;
which practically extends the ocean navigation for seven
months of the year to Chicago, Duluth, and Milwaukee, and
all the other ports on the great chain of lakes.

Q. When is it supposed that the Welland Canal will probably
be completed ? A. In 1881 it is expected to be completed.

Q. So that in 1881 New York will be threatened with a
diversion of trade coming from ocean going vessels passing
straight to Chicago ? A. Straight to Chicago ; whether they
will adopt that plan, or whether they will tranship at Montreal,
remains ioc practical development ; but it will be perfectly
practicable for theui, I think, to go with steamers of that size
from all Eiiropeaii ports for seven months of the year.

Q. Is that a work in Canada undertaken by private enter-
prise or Government work? A. It is a Government work ; all
the canals in Canada have been built by the Government.

Q. Have you any knowledge on the subject of the cost of
that work V A. I have the figures — the original cost of the
St. Lawrence canals and of the Welland Canal, but I cannot
give them now from recollection.

Q. Will you furnish them to the Committee ? A. I will find
them ; yes, sir.

tj. Also the cost of this Welland Canal extension ? A. I
know what the estimated oust of the enlargement was to be,
but whether the actual cost will correspond to the estimate
remains to be seen ; if it is like our canals in New York, it
will probably cost more than what the estimates were.

Bj Mr. NoYES :

Q. Are those canals to be free, or will a toll be charged up-
on them ? A. There is a very small toll ; I have also a toll
sheet, and wheu property pays toll passing through the Wel-
land it pays no toll on the St. Lawrence canals, and vice versa.

551

Q. Will that probably be continued when the canal is com-
pleted in 1881 ? A. I think it will ; I think the policy of the
Canadians is to draw the trade through Canada, if it is possi-
ble to get it.

Q. Would not the toll upon that canal obstruct raiher than
facilitate trade ? A. The small toll that they charge does not
make a Tory large difference] it is quite small ; I can furnish
the Committee tbe rates if desired; the movement through
Canada, including the receipts at Montreal, which are most-
ly comprised of grain from United States ports — at any rate
very largely — have been, with the imperfect facilities thntthey
now have, from 20 to 24 million bushels a year ; but the low
rates of freight on the rail throiigh this State, through Penn-
sylvania, through Yirginia, and the reduction of tolls ou the
Erie Canal, has checked the movement that way to some
extent during the last two years, so that they have fallen be-
hind in ratio.

By Mr. Steene :

Q. Montreal has ? A. Yes, sir.

Q. You have already given us the receipts of seven sea-
ports ? A. Five seaports in this statement here I gave ; I have
the receipts of the seven ports also ; that includes Portland ;
the percentage is very small at Portland ; mostly a move-
ment through Canada at winter ; and the movement by the way
of New Orleans ; the movement by the way of New Orleans is
no more than about twelve million bushels a year, and under
this competition — under these very low rates of freight, we had
last week, the last two weeks, when they were carrying grain at
6, 8, 10 and 12 cents a hundred from Chicago, and the canal
rates were four cents a bushel from Buffalo to New York, and
the lake rates a cent and a half a bushel from Chicago to Buf-
falo—it checked the movement by New Orleans, so that there
is scarcely anything moving there now.

Q. Have you the average rates of rail freight for fourth
class freight from 1877 ? A. I have the rates as were given in
the tariffs for those years.

Q. You have not the cut rates for those years ? A. I don't
know what the cut rates were ; no, sir.

Q. The tariff was not maintained for that year at all, was
it ? A. There were changes in the tariff all through the year ;

552

five, six, seven, or eight of them ; there were changes from
time to time ; I suppose it was based upon agreements at
meetings of the different interests lepresenting the different
roads.

Q. What rate was that that you just mentioned ; eight cents
a hundred? A. Yes, sir ; they v.ere takeu last vreek at eight
cents a hundred ; it was at &ix cents a hundred from Chicago
to New York.

Q. How much would it be from Buffalo to New York ; what
percentage ? A. Well, it is about 538 miles against 461 miles
by the Eiie road ; it would be 538 miles by the Lake Shore,
and 461 by the Erie.

Q. No; but how much of the rate of eight cents a hundred
would the New York Central get ? A. I don't know how they
divide it.

Q. That you don't know ? A. No, sir ; I know grain was
taken at that rate, and also taken at eight cents, and at ten
cents, and at twelve and a half cents during the same week.

Q. What were the rates on flour during the same period of
time? A. I don't think I noted what the rates were on flour- -
I have the rates on flour this last week.

Q. How much is that ? A. The rates on flour from Mil-
waukee— I don't know as I have them Chicago — the rate from
Milwaukee, all rail, was seventeen cents a hundred, to Boston it
was twent;) -two cents, Philadelphia fifteen cents, Baltimore
fourteen cents a hundred ; and flour, all rail, from Milwaukee
to Boston forty cents, Philadelphia twenty-five cents, Bltimore
twenty-three cents.

A. Does that mean per barrel or per hundred? A. Per

barrel ; fiour goes by barrel and the other freiget by hundred.

Q. Therefore, that would be but half the rate ; a barrel of

flour weighing about two hundred pounds? A. About two

hundred pounds;^ it makes the rate about the same.

Q. The rate on flour about the same as for grain ? A. About
the same ; yes, sir ; the through rate on grain to Liverpool-
steam — at the Slime time was thirty-two cents per hundred
pounds, or §6.40 per ton, gold ; and to Glasgow the through
rate Iroin Milwaukee was thirty four cents, or $6.80 a ton, pay-
able in gold.

Q. That is the rate from Chicago ? A. From Milwaukee,
(c^. To Europe ? A, For Europe ; yes, sir.

563

Q. Througli New York ? A. And through the other ports ;
I gave the rates ; that is through New York ; yes, sir ; I have
not the rail rate from Chicago for last week ; I have the lake
and canal rates.

Q. You have those rates ? A. have not the rail rate from
Chicago ; I looked for the tariff before I came up hei'e, but I
did not have it, but I think the present rates weie brought out
in the examination you have had here before ; what they agreed
upon.

Q. In the earlier period the greater part of all this trade
came by water, didn't it ; the railroads carried very little of it ?
A. Yery little came by rail previous to 1855 or lf:56 ; very little,
indeed ; and it was very small previous to 1853 ; at that time
the Baltimore & Ohio had not completed her connectious ; tlie
Philadelphia & Erie Road had Dot beeu finished ; the Penusyl-
vania Central had not completed its connections; tLe Lake
Shore was built, I think, somewhere about 1852 or 1853 ; I
think it was commenced about that time, and the business that
came by rail to Buffalo came mostly to go through by Lake
craft to Western points.

Q. It came, a great part, from the State of New York, too,
didn't it ? A. Yes, sir ; it came from New York ; goods, mer-
chandise, generally from New York.

Q. Have you noticed a change in relation to the im-
port trade? A. I made up tables in this respect of the num-
ber of vessels, of the tonnage of vessels, of all vessels entering
all ports of the United States from all foreign countries, in-
cluding foreign vessels and American vessels and a comparison
of the totals with the entries of New York.

Q. Well, now, what does that show ? A. T made up such a
table for a period of twenty-five years, in periods of five years
each ; I made up a table representing the tonnage that entered
all the ports of the United States, including American and
foreign vessels from all foreign countries, in periods of five
years from 1 854 to 1878, inclusive.

Q. Does that show a deterioration of the commerce of New
York as to ratio? A. I will give you the ratios: from 1854
to 1858 — five years— New York had/O^VTr per cent., and all
other ports 59 ^Vo per cent., from 1857 to 1863— five years —
New York had 4yTVu per cent.

Q. That was an increase ? A. Yes, sir ;. and all other ports
58

554

SOiVt per cent.; from 1864 to 1868— five years— New York
had 53 i^uV per cent. ; all other ports 4G ^Vo P^r cent.

Q. That was a decrease, wasn't it? A. From 1869 to 1873—
five years— New York had 50 xVV per cent. ; all other ports had
49 ^8_4_ . from 1874 to 1878— five years— New York had 47 AV
per cent. ; all other ports 52 -rVir per cent.

By Mr. Loomis :

Q. What page is that? A. Page 263.

By Mr. Stebne :

Q. That shows a gradual decrease from almost 60 per cent,
to 47 ; is that it ? A. It shows a gain for the first part of the
peiiod, and now it begins to shows a decline.

Q. A decline from Avhat point ? A. There is a decline of
about 3 per cent, for the period from 1864 to 1868 as compared
with the period from 1869 to 1873.

Q. On the whole period, from 1864 to 1878, what is the de-
clioe? A. From 1861, there is a gain as compared with 1854.

Q. I know ; 1864 ? A. There is a gain of seven per cent,
as comparing the last period with the first.

Q. From 1864 there is a decline, is there not ? A. From
1864 they began to decline.

Q. Now, from that period to the present time ? A. There
has been a decline of about six per cent, in the ratio ; this is
the tonnage of the vessels entered ; I also have ratios for the
like periods, or for twenty years, in periods of five years, of
the domestic merchandise, coin and bullion exported and the
imports of merchandise, corn and bullion.

Q. Take the import import — what does that show ? A.
From 1839 to 1863, five years. New York had 6G-[%\ ', from
1861 to 1868, New York had 66r%\; from 1869 to 1873, New
York had 63yVo per cent.

Q. That was a decrease ? A, Yes, sir ; from 1874 to 1878,
five years, New York had 66jVu per cent.

Q. That was 1878 do you mean? A. The five years ending
with 1878.

Q. And what is it as to the exports ? A. The exports

Q. Is that included in the other table showing this grad-
ual increase of ratio in other Cities — does that give the ratio

565

of total exports ? A. Yes, sir ; the ratio of the total exports
from hhe whole United States.

Q. Let us have that? A. The exports of domestic mer-
chandise, coin and bullion, which covers all this ; from 1859
to 1863, five years. New York exported 50^^^ per cent. ; aud
from 1864 to 1868, five years. New York exported 54/„*u per
cent. ; from 1869 to 1873, five years. New Y'ork exported
il-njiT per cent.

Q. That is a considerable decrease ? A. And from 1874 to
1878, five years. New York exported 47xW P^i' cent.

Q. So that there was a decrease of how much percentage
there — the total? A. There was a decrease, comparing the
first period with the last, of about 2| per cent. ; comparing
the maximum, there was a decrease of about seven per cent.

By Mr. Loomis :

Q. Mr. Walker, the information in that book was all collected
and collated by you, was it not ? A. All these figures that I
have been giving I did it personally myself.
■ Q. All that are in the book that you have not given; who
were they collected by, aud tabulated ? A. I have an as-
sistant in the office who makes up some figures.

Q. You are willing to voucli for the correctness of all
that is in that book ? A. Yes, sir ; because they are proved
all the way through ; everything is proved before it goes into
print, before the copy is given out.

Q. If we have occasion to read anything from that book,
which you have not referred to, we shall understand that it
is correct ? A. I believe it to be accurate throughout.

Q. You gave in answer to Mr. Sterne the total quantity of
maize received at five ports, aud at the Port of New York
during the year 1878, I think ? A. At three ports.

Q. Why did you select that commodity ? A. It might
have been the same thing from wheat ; notqnite as marked ; the
reason why I selected it was to show that these outside ports,
from these diminished rates, or the low rates of freight, were
taking the trade away from us ; I say that our railroads have
fought to get it back again, and they have paid dearly for it,
and they are trying tb keep it up, so as to hold their position.

Q. You did not include in the statement of the amount of
maize received at this port in 1878, the amount received by

556

water, did you ? A. No, I did not include the amount receive
by water.

Q. Will you state that amount ? A. I will, sir.

Q. If you cannot readily turn to it, and it is in the book, you
need not spend the time ? A. It is in the book, but it wil
have to be added together.

Q. If you have not made a computation you need not delay
the Committee now ? A. I can give you the page so that you
can refer to it; pages 288 to 29] gives r. methodical statemen
of the receipts by all routes including rail and water.

Q. At the Port of New York ? A. Yes, sir.

Adjourned to June 21, 1879, at 10 A. m.

New York, June 21, 1879.

The Committee met pursuant to adjournment.

Present : All the members of the Committee except Messrs.
HusTED and Grady.

Albert Fink's examination resumed.

By Mr. Sterne :

Q. Mr. Fink, what is the rate per hiindred now from New
York to Chicago, under the so-called pooling arrangement ?
A. The present tariff rate is seventy-five cents a hundred first
class ; sixty cents, second class ; fifty cents, third class ; forty
cents, fourth class.

Q. Now, do these rates, between the different classes, cor-
respond to differences in expense of the transportation ? A.
Not at all.

Q. These are arbitrary, are they not, to a great degree ? A.
Well, you can hardly call it arbitmr}' ; they are based upon
a general principle of charging for the various goods according
to what thev can stand, within reasonable limits, so as not to
destroy or suppress the business ; to ericourage, as far as pos-
sible the commerce, and obtain from the various classes the
best possible rates and compensation.

557

Q. The main, principal view is, isn't it, that it is based upOll
what it is supposed the goods will stand ? A. Yes, sir ; just
like any other merchant would sell his goods ; they cost him
so much, aud lie gets as much more for them as he can in the
market.

Q. In that way the transportation company gets as much
more for its services as it can ? A. It is the same with
transportation as with any other article ; the same principle
that Ruj intelligent merchant would observe in fixing the rates
on his goods that he has to sell are observed in making tariffs.

Q.- Is it your conviction that a railway corporation stands in
the same position, in its relation to the public, that a private
business does ? A. Exactly the same, within the limits pre-
scribed by law.

Q. You do not think that the fact that they receive State aid
and excercise the right of eminent domain, makes any differ-
ence in their relation to the public ? A. It makes that differ-
ence, that they have to observe the laws and contracts under
which they have received these grants, and if they have done
that, the rest of their operations are subject to the laws of
commerce and trade.

Q. But every citizen has to observe the laws? A. That is
all that a railroad company has to do.

Q. That is your opinion ? A. Yes, sir ; I don't know what
more they can do.

Q. We won't argue it ; I am asking your ©pinion ? A. I
am very glad to answer it; as you have asked me the relations
of railroad companies to the State ; may I give my opinion more
in full on the subject?

Q. No ; let the other side draw that out if they like ? A.
It is pertinent to this inquiry.

Q. I know, but I merely want to know whether, in your
opinion, the granting of State aid or County aid, aud the exer-
cise of eminent domain makes any difference ; you say it does
not? A. I was going to say it makes no difference whether
it is a corporation or whether the same contract would be
fulfilled by a private individual ; that the laws in both oases
wotild be exactly the same.

Q. Do you know of any instances in the history of road
building in this country where the right of eminent domain

558

has ever been exercised by a private individual ? A.I don't
know of any ; no, sir.

Q. Therefore, there is practically no such similarity, because
there is no such case ? A. There could be such a case if the
private indiuidual had money enough ; but I mean to say the
relations are perfectly the same — exactly the same.

Q. The theory why individuals do not get those grants is
because the State originally supposed that in giving to many
individuals in a corporation, it dealt out tliose franchises to
many individuals for better protection to itself ? A. They
have not money enough to build railroads; that is the "only
reason, I suppose.

Q. Forty cents, you say, for fourth class to Chicago ? A.
Yes, sir ; at present ; please allow me to state that that is by
all rail ; there are lines working by rail and by lake, carrying
freight from here to Buffalo by rail, and then from there by
lake, in connection with the railroad ; they only charge twenty-
four cents.

Q. Do you know how much of that the New York Central
gets ? A. Of all the freight ?

Q. Of the forty cents? A. They get about forty- six per
cent, of it ; about that.

Q. And you told us yesterday that that rate paid the rail-
road company for the haul ? A. Yes, sir ; I think that pays,
considering that the cars are generally returned empty.

Q. What rate would be a loss to the company ? A. Upon
the western bound business ?

A. Yes, sir ? A. I think that anything under fourteen or
fifteen ; fourteen cents and under from here to Chicago would
be a loss ; that is, not counting the cost of returning the cars.

Q. Now, what would be a loss from Chicago to New York ;
what rate ? A. I think anything under fifteen cents would-
be a loss.

Q. Everything over fifteen cents would pay a profit ? A.
That is, of course, a matter of estimate.

Q. I am asking your estimate ? A. My judgment is, that
anything under fifteen cents would be a loss.

Q. Fifteen cents and under from Chicago to New York '? A
Yes, sir.

Q. Of which 46 per cent, would go to the New York Central
Railroad ? A. Yes, sir.

559

Q. Everything over 15 cents a hundred is a profit, and
everything iinder is a loss ? A. Yes, sir ; that is, I think
estimating it low down.

Q. Now, then, in that estimate do you include the element
of capital account ? A. No, sir ; this is operating expenses.

Q. Now to that should be added the cost of the road ? A.
The interest on the cost of the road.

Q. If we get then at the actual cost of the road and interest
upon that, why, we can form an estimate upon the basis
that you have given us of what it costs ; what transportation
expenses are? A. That is speaking of tlie through business;
of course there are elements in the cost of transportation that
at present do not enter into the cost ; this cost constantly
clianges ; I base this present estimate of fifteen cents upon
the low report of cost made by the Lake Shoie Railroad lately,
which is the lowest I have seen ; it is given on the New York
Central Railroad itself higher in the reports ; I based it upon
the Lake Shore as being the lowest.

Q. The New York Central gives it as six mills and seven-
tenths ? A. And the Lake Shore gave it as four and six-
tenths ; hence, this is not the cost of the New York Centi-al
according to their reports, but I based it upon the lowest pos-
sible cost, and assuming the New York Central could be
operated as cheap as the Lake Shore.

Q. Now, how many cars are there on an average freight train
on the Baltimore & Ohio? A. I think they do not average
more than about twenty-five to thirty cars.

Q.. Thirty is the utmost, is not it ; fall cars I am speaking
of ? A. Yes, sir ; full cars.

Q. How many on the Pennsylvania? A. About forty to
forty-throe cars to a through train, they estimated ; they can't
haul so much on one division ; they haul less upon the moun-
tain division ; they can haul that on an average ; they have
one division on their road which is almost level, and they make
up by hauling more.

Q. More than forty-five ? A. Yes, sir ; they draw sixty or
seventy cars on that division.

Q. Don't they do that by having heavier locomotives ? A.
Yes, sir : they iiave generally heavier locomotives than on other
roads ; generally, I think, the locomotive power is heavier.

Q. That is the Pennsylvania Central road ? A, Yes, sir.

S60

By Mr. Shipman :

Q. Is there any such company as the Pennsylvania Central ?
A. That was formerly the name; it is the Pennsylvania Kail-
road now ; I knew what Mr. Sterne meant.

By Mr. Sterne :

Q. There is another company called the Pennsylvania Com-
pany, is there not ? A. There is another company called the
Pennsylvania Company ; that is another company.

Q. That is all the leased lines ? A. Yes, sir.

Q. On the Erie, what is tlie average ? A. My information
is that they carry from twenty-seven to thirty cars on the
Erie ; that is the average ; they also carry on one division
more, and on others less.

Q. But the average through train is twenty-seven to thirty
cars ? A. That is my information ; I do not, of course, wish
to speak for the Erie road, but that is my information.

Q. Now, have you estimated the cost of transportation on all
these lines to be the same? A. They are very different , there
is some difference in them, of course.

Q. It is higher on the Erie than on the Central ? A. I be-
lieve the reports say that it is higher.

Q. From yoar personal knowledge as an expert, in going
over that line, and having gone over the New York Central
road, you could see the operating expenses miist be higher?
A. There is no doubt about that.

Q. The grades are heavier ; there is less local traffic, and
there is more wear and tear than on the mountain roads ? A. I
would say from the physical condition of the two roads, to
judge from them, that they ought to be higher ; it don't follow
from that, however, that they ought to be higher ; there are
other elements that come in to be considered.

Q. Well, what elements are there which are in favor of the
Erie, so far as operating their road is concerned, as against
the New York Central? A. I suj^pose their cheap coal would
be one of the elements that would be in favor of Erie ; I think
the coal on the Erie Railroad is cheaper than on the New
York Central, is it not? the Erie may have machinery adapted
to the mountain grades better than the Central.

Q. The Central has not any mountain grades, therefore it
does not require any machinery ? A. You can assume a case

561

in which the Erie can haul as many cars over the road as the
New York Central; if the New York Central has small engines,
and the Erie large engines, that makes a difference.

Q. But don't let us assume cases we do not know anything
about? A. We must assume that the conditions are alike on
both roads, and then you can make a comparison.

Q. Now, assume the conditions to be alike as to engines
and as to cars, and as to intelligence and economy of man-
agement ; as to skill of engineers, and all that — of course,
we can assume that to bo alike— why the difference in the
grades, and in the physical conditions of the roads would make
a difference in favor of the New York Central, would it not ?
A. Certainly; that is stating the case now correctly.

Q. Assuming, then, these like conditions also, and assuming
the conditions of grade to exist, as you know it to exist ; the
difference in the large local traffic of the New York Central
would make an element in favor of the New York Central,
would it not ? A. Allow me here to explain to you the ele-
ments which enter into cost of transportation.

Q. Yon did so yesterday? A. No, I wish to state that the
cost of hauling the f eight is very much tbe same

Q. (Interrupting.) I must interrupt yon because I want an
answer to my question ; the responsibility rests to some degree
upon me to determine what I think to be relevant and what
material ; assuming the other conditions to be precisely' as we
have assumed in the last question, with the difference of grade
in favor of the New York Central, and assuming that there is a
larger local traffic on the New York Central than upon the
Erie, is not that a condition also favorable to _ the New York
Central as to its general traffic ? A. As to its revenue it is,
as to its income ; the larger the traffic of course, the greater
tbe income, and if you mean that, it is so.

Q. No, but I mean this : as to the possibility of carrying
freight cheaper for long distances than other roads can, by
reason of the large local traffic that they have, which gives them
an absolutely cei'tain revenue ? A. I don't think your ques-
tion admits of an answer of, yes or no, at all, and I must ask
that I be allowed to answer your questions in my own way to
cover the case completely ; T don't wish to put myself in a
position to be misunderstood.
59

662

Q. 1 will waive that question and put a different one ? A. I
can answer it in two minutes.

Q. No, assuming two roads next to each other running to
precisely the same points as terminal points ; the one having a
large population on the intermediate points, and the other
entirely dependent upon its terminal points for its revenue;
could not the one that has the large intermediate traffic do the
business for the terminal points at lower rates as a matter of
railway economy, than the one that is dependent upon the
terminal point business ? A. Do you also assume the through
traffic is the same over the two roads ; the Erie road may have
more through traffic ?

Q. The same terminal points ? A. Still it don't follow that
they should have the same amount of traffic ; your question
resolves itself into practically whether two roads, one having
a larger traffic than the other, whether the one can operate
this road cheaper.

Q. That is practically my question. A. And I say of course
it can, and I want to point out to you the difference and the
reason why it can.

Q. I don't want that just now ; let Mr. Blanchard draw that
out if he wants it ; I want simply the fact that it can be operated
cheaper ; you told us yesterday, if I remember riglit, that this
condition of competition between railways you believed to be
injurious to the community ; that is, the condition of compe-
tition that existed ? A. The condition of fighting between
railway companies ; yes.

Q. You don't mean fisticuffs or bayonets by that ? A. I
mean a war of rates.

Q. A competition in rates ? A. The cutting of rates and
paying of rebates.

Q. Now, in all other legitimate business of which we have
any knowledge the fighting between the different business
men results favorably to the community ; they get the hi<>;hest
efficiency of service at the lowest possible rates? A. Yes, sir.

Q. That is the law of competition in all business ? A. Yes,
sir.

Q. You say that is not true of railway competition ? A. Not
true so far as the relations of the railways to each other are
concerned.

Q. I have only one point of view in this just now ; why is not

563

that true as to its benefits upon the community ? A. Why
does the competition between railroads — - —

Q. (Interrupting). Why is it that competition between dry
goods houses results in furnishing us the best quality of goods
at the lowest possible rates,, and is a benefit to the consumer
and the general community, and in every other business the like
conditions are true as to competition, except, you say, in
railways ; why doesn't it hold good in railway economy ? A.
You have pointed out the reason already ; the railway com-
panies are public servants, as you say ; there conies in one
of the distinctions.

Q. It is because they have control of highways, isn't it ?
A. No ; it is because they have to serve all people alike ; the
great difficulty that you make in this matter is, that you don't
make the proper distinction between railway companies as
public servants ; you ask them to be public servants, and con-
form to the laws of common carriers.

Q. When you say " you," you mean everybody ? A. Yes,
sir ; I mean there is the greatest distinction between the rail-
way company and Mr. Thurber's business ; Mr. Thurber is a
merchant here, and there is no law compelling him to make
his rate the same as another party, and he can vary it as he
please.

Q. Do you think there is a law as to railroads? A. Yes ;
there is a law as to railroads, that the public should be
served alike by common carriers ; if that law is to he carried
out, it is necessary that you eliminate the element of competi-
tion as between these railroad companies ; joii cannot have
the two at the same time.

Q. Where do you find such a law ? A. Don't you operate
upon that law; really, I must ask you to let me finish my
answer to the question before you interrupt me.

Q. I will ask an intermediate question ; if you are mistaken
upon the question that there is such a law, then, of course,
your answer don't apply? -A. But I am not mistaken.

Q. If it should turn out that you are mistnken on that point,
your answer would have no application ? A. You deny, then,
that there is a law that no unjust discrimination must be
made between shippers.

Q. There is none in this country that I know of ? A. There

664

is no statute law but a common law ; you read yesterday a
statute law covering the same point.

Q. That is the English law of 1854 known as the Cardwell
Act as the result of inquiry upon these discriminations in
England ? A. Now, suppose there is no law ; I will assume
there is no law ; there is certainly on the part of all the people
of this country a desire that common carriers should make no
discrimination between the shippers ; now, the position I hold
is, that that desire — and I think it is the object of your inves-
tigation to bring that about — cannot be executed, cannot be put
in practice, while at the same time the competition between
the various railroads, as it now exists, is carried on ; that it
is necessary for you to decide one of two things, whether you
will have just and equitable rates for transportation for all
■ people alike, and no competition as between the carriers them-
selves—I don't exclude proper and legitimate competition, but
only that competition as between the carriers, by which each
tries to take away the business of the other ; I say you cannot
unite those two requests that you make upon the railroads
to carry on competition and to furnish you just and equitable
rates of transportation ; Id that re-pect — and that is the ques-
tion you ask — the railroad transportation business differs from
the private business of a merchant who can make whatever
rate he pleases, and who is further guarded and restricted in
making his rates to the actual cost of producing the articles ;
if a merchant was going to do as railroad companies generally
do, to work for less than cost, he would soon stop his business,
and competition would soon be broken up in that way.

Q. Explain why it is railways do not stop their business
when they work for less than cost? A. There are several
reasons for that ; railway corporations have a large credit, and
they sometimes don't find out that they ai'e broken before
they are broken ; they don't know what they are doing in a
great many instances, and it is a very difficult matter to de-
ter njine

Q. When they are broken they do not go out of business ?
A. No, they commence again.

Q. And not only commence again, but keep on under a re-
ceiver ? A. Yes, sir ; that is one of the great difficulties to
which I wished to call your attention yesterday, that in these
railroad fights you nsked me last night the question in regard

565

to Philadelphia and New York ; why the New York roads could
not make lower rates than Philadelphia, and keep on making
lower rates until they bankrupted each other ; alter that is
done of course the roads are still there and run by somebody,
so that it does not decide any question at all.

Q. That is what I want to get at ; the fact is, that another
reason why the law of competition does not apply to railwiiys
is because the railway that is driven to the wall does not go
out of business, but goes on, and goes on, under conditions
which enable them to run cheaper than the solvent road? A.
Yes, sir; that is one of the reasons; a merchant when he is
broken down goes out of business ; a steamboat also ; but a
railroad is there all the time.

Q. It is there and operated, and when relieved from the
stock capital and bond capital it becomes a more dangerous
rival as a bi'okeu road than when solvent? A. That is so.

Q. And the history of railroading in this country shows that
an insolvent road is a more dangerous rival than a solvent road,
a solvent corporation ? A. In carrying on the competition
between railroad companies , that is, it not necessarily is, but
it may be, if it chooses to be.

Q. For instance, in the Grand Trunk Railway that condition
is illustrated perhaps best of all ; there is a road with a longer
mileage operated under extreme difficulties ; snowed up a good
part of the winter, and yet they carry goods a great deal
cheaper than the solvent roads ? A. They have to carry them
cheaper — being a longer road, if they want to compete with
shorter roads.

By the Chairman :

Q. They do carry them cheaper ? A. They do ; I must
qualify that ; the agreement is that they must carry them at
the same rate ; you must allow' me to answer the question ; I
have not got through.

By Mr. Sterne :

Q. I must stop you a little. A. I say they are not carried
cheaper ; I say cheaper, nominally, but really they do not carry
cheaper, and that is the point I wish to explain to the Chair-
man of this Committee, and you must permit me to do so ;
while the nominal rate is less than the rate of the other com-

566

panies, their competitors, the diiference in rate made is an
equivalent to the shipper for the disadvantages of that route,
so that really the rates are alike ; the object is to make the
rates alike to the shipper, and that is done practically by re-
ducing the rates, absurd as it may seem of the Grand Trunk
Eailroad ; there is a difference, say on fourth class freight from
Boston to Chicago of four cents a hundred in favor of the
Grand Trunk Railway; that four cents represents the in-
creased time the goods are on the road ; insurance ; if they
are not considered as solid a corporation as the other, and
the shipiier pays that much less, he takes in place of that four
cents the disadvantages of the route ; so that the rates are
practically alike ; if that was not the case, as a proof that they
are ahke or nearly so, if the Grand Trunk charged four cents
less for freight than other roads, and possessed the same
facihties to carry that freight as the other roads, they would
necessarily secure the whole business from Boston and other
points where that arrangement exists ; the fact is that they
only secure a portion of it.

By the Chairman :

Q. I understand, so far as the public are concerned, the
rates are practically the same? A. They are.

Q. So far as the railroad is concerned they are much less ?
A. Much less ; they cover insurance, disadvantages of the
route and all those items ; if that was not the case the
Grand Trunk would carry every pound of freight out of Boston ;
let the New York Central make a rate four cents less than any
other rate, and there would not ' be another road to carry a
pound of freight.

Q. So far as the profit on the stock of the Grand Trunk is
concerned they do carry it cheaper than the New York Cen-
tral? A. They must carry it cheaper or they could not carry
it at all ; they are laboring under disadvantages and they must
purchase their business by reducing the rates.

Q. That road is insolvent, is it? A. Ob, no; I don't un-
derstand so ; it is not in the hands of a receiver ; it is not
paying anything to its stockholders, but it is not insolvent ; it
it is managed by the President and shareholders in England.

567
By Mr. Sterne :

Q. T&at is because they have no bonds? A. The share-
holders get no profit from the road.

Q. They get no divitlends, although the shareholders have
still control of the road? A. They still have contiol.

Q. The mileage, therefore, in long distances don't determine
the rate ? A. The distances have very little to do with the
rates ; only as a general principle wherever it can be ap-
plied ; but in most instances distances have to be disregarded,
because there are other elements which determine the rates

— the elements of competition

Q. (Interrupting.) Answer my question ; the longer the haul
the less the element of distance comes in ; isn't that true ? A.
I can't answer yes or no either ; because it depends altogether
upon the conditions under which the haul is done ; the louger
the haul on a local road where you have no competition the
greater the cost and the greater the tariff.

Q. The longer the haul the less the element of distance
coraes in; isn't that true as to through points? A. As a
general rule the distance disappears more and more.

Q. And that is because the longer the haul the more the
element of terminal handling disappears ? A. No, that is not
the reason.

Q. Isn't that the reason? A. The longer the haul the
greater, as a general rule, the elements of competition ; not
only that, but as I "said before, the tariff is made out on com-
mercial principles and there are certain articles — certain
goods that cannot be transported at all if you charge a certain
amount for them ; if you were to charge in proportion to dist-
ance upon a great many articles, for example, grain from the
West, you would not move the grain at all, and then it be-
comes necessary, as the cost of transportation would increase
by the length of the haul, that you should reduce the profit to
tlie railroad company in order to move articles that otherwise
could not be moved, if you were to adopt a cast iron rule of

charging

Q. (Interrupting.) You are getting away from my question
again. A. No, I am not getting away from your question ;
you want to know why the distance disappears m the longer
haul,

568

Q. No, I don't ask you the reason ; pay attention to my
question ; it either admits of yes, or no, or, it is not so ; for
instance, is it true, or is it not true, that the longer the haul,
the more the question of distance disappears ? A. As a gen-
eral rule, I say it is true ; it is not true in all cases. I appeal
to the Chairman whether you did not ask me what the reason
was why the distance disappeared.

Q. No ; I put the general question : "Is it rot because the
terminal handling disappears?" A. And I said no; now I
must say why.

Q. No, you mnst not. A. I must insist upon it ; I will not
answer any questions unles^s I can answer them fully.

The Chairman — The Committee are disposed to place a
great deal of stress upon your opinions, and I think your testi-
mony would he moie valuable to the Committee if you would
answer them, yes or no, so far as you can.

The Witness — It is utterly impossible to answer his ques-
tions yes or no, so complicated is their nature ; I would do
myself an injustice and would leave you under a wrong im-
pression ; I don't wish to detain you any longer than is neces-
sary, but I think you have a full understanding of the neces-
sity of my explaining as I go along ; I may never think of
these things again ; I have put myself on record as answering
these things; one-half tlie gentlemen on the other side may
not di aw my explanation out and I stand here answering ques-
iona, and making false impressions on the public, and I really
must ask that I be al'owed to answer fully.

By the Chairman :

Q. Does not your documentary evidence, put in here, prac-
tically cover this whole ground? A. It covers a great many
things. •

Q. (So far as it does, the Committee could rely on that, then?
A. It covers perhaps some of these points, but not as com-
pletely as they are drawn by Mr. Sterne.

By Mr. Sterne :

Q. Is it your opinion that it would be wise policy to divide
in the freight bills, as it is in England under the law, the cost
of terminal handling from the cost of haul ? A. I think so.

569

Q. Have you paid any attention to the traffic l^nown as the
petroleum traffic ? A. No ; I have not.

Q. That does not come under ^your supervision at all ? A.
No ; I have had nothing in the world to do vi^ith it.

Q. Is that excepted from the arrangement made now as to
east bound traffic ? A. Entirely ; yes, sir.

Q. That is excluded ? A. It is only an arrangement between
the trunk lines in which the other roads are not interested — the
western roads, fo far as I know ; the arrangement that now
exists between the trimk lines and the western roads only em-
braces the shipments of grain and live stock, and the petroleum
business is entirely excluded.

Q. That is still left in the same condition it was before any
east bound arrangement was made ? A. So far as I know ; I
do not know what condition it is in.

Q. You are down here as stating, in answer to the question
of Mr. Nimmo, that low competitive rates make higher local
rates necessary ? A. Comparatively higher, I said.

Q. No? A. That is what I meant, and I have stated so
other ways ; what I mean is this : by making the low competi-
tive rates the local rates appear high ; they, in themselves,
may have been perfectly reasonable before those low competi-
tive rates were made, but they are kept up as high as they
possibly can be kept, of course, and that is one of the objec-
tions to the low competitive rates.

By Mr. Baker :

Q. Do we understand you to say that lowering through rates,
as a rule, has the effect to increase local rates as far as possi-
ble ? A. No ; I did not mean to say that exactly, because it
has the contrary effect; in a great many cases it will lower
them ; but it has the effect to make the local rates appear un-
reasonably high ; that is illustrated by the fact that when grain
is carried for 12 cents from Chicago to New York, and you
charge from Buffalo or Syracuse 25 cents, that makes the local
rates appear unreasonable, and they are unreasonable.

By Mr. Sterne :

Q. Has it not the effect to exclude the goods produced at
those local points from the market ? A. Yes, sir ; it is an un-
just discrimination against those local points.
60

570

Q. Because grain raised in Kansas, on lands that are worth
$2.50 an acre, is carried at lower rates than grain raised'in the
neighborhood of Syracuse on lands worth $150 an acre ? A.
Yes, sir ; it is very wrong ; one of the bad features of our pres-
ent railroad system.

Q. You. gave us yesterday a reason for the exception to the
rule that the railway manager should not make discriminating
rates ; will you give us now the reason of the rule ? A. For
which rule ?

Q. The rule that you laid down, that the common carrier
should strictly adhere to the rule to charge the same rate for
transportatiou of the same article between the same points,
only discriminating on account of quantity, as far as it influ-
ences the cost of transportation ; now, yesterday you told us
there were exceptions to that rule ; now, will you give us the
reason for the rule ? A. The reason for the rule that there
should be no discrimination?

Q. Yes, sir. A. That was founded, I suppose, in that common
law which I believe to exist, which is a self-evident proposi-
tion, that the common carrier shall treat all persons alike ; I
think there is nothing better established than that, and requires
no reason to show its justice.

Q. You think that is so eminently just a rule that its state-
ments should carry conviction ? A. It seems to me so.

By Mr. Bakek :

Q. Will you be kind enough to give the Committee a
statement of the expense of the department under your
charge, for clerk hire and salaries ? A. I can only speak from
memory about it ; in my office there is a great deal of work
done ; I don't know whether I ought to explain that to you.

Q. How many clerks have you ? A. I have about sixty
clerks in my office ; sixty-five.

Q. Under your charge ? A. Yes, sir; the object is to col-
lect the statistical information of the business that goes out
from the cities — the seaboard cities — and is distributed over
the roads ; and an account is kept in my office of all the busi-
ness that is transacted by each road in the west, with a view
of distributing between these roads their traffic from the east,
to give to each the agreed proportion of the traffic ; there are

671

five hundred different routes by wbich freight is shipped out of
the four seaboard cities ; that is to say, five hundred different
combinations of routes, and each of these routes desire to share
in the westbound business, and an account has to be kept to
show what that business actutdly is, with a view of bringing
about a proper distribution of it, and that requires, of course,
a great deal of clerical labor.

Q. That is all in connection with your duties as Commis-
sioner ? A. Yes, sir.

Q. What is your salary ? A. I prefer you would not ask me
that question ; it is a matter of a private nature.

Q. The Committee would like to know the expense of main-
taining your department? A. I can give you, iu round num-
bers, the expense of my office ; it is about 15,000 a month, in-
cluding my salary and clerk hire.

By Mr. Blanchaed :

Q. Is that divided among all the seaboard cities, Mr. Fink?
A. Yes, sir.

Mr. Steene — Divided among the trunk lines ?
Mr. Blanchaed — I mean New York, Baltimore, Philadelphia
and Boston ?

The Witness — Yes, sir.

By Mr. Bakee :

Q. Do you make a periodical report of the business of your
office ? A. Yes, sir ; I make a daily report of everything.

Q. Is that printed ? A. Yes, sir ; they are put in stencil
printing, by the electric pen, but mostly they are printed so ;
sometimes put in type.

Q. How often do you make a printed report for distribution ?
A. Very seldom ; most of it is done by the other method ; fifty
or sixty reports are issued from my office every day almost.

By Mr. Steene :

Q. Could you give the Committee for its information, for
instance, a duplicate of such a set of reports ? A. Yes, sir ;
any reports that you desire.

Q. For instance, one day's set of reports, a stencil set, as

572

you would send it to the railroads themselves ? A. And in-
cluding a monthly report ?

Q. Just one, so as to show the nature of the business of that
ofBce ? A. Yes, sir.

Q. The whole of the expense of your office is borne by the
trunk lines ? A. At present they are borne by the trunk lines;
some of the expenses are borne by western roads ; the statistics
of the western roads are kept in my office as well.

Q. It is a very small proportion ? A. It, perhaps, employs
one-sixth or one-fifth of the whole force.

By Mr. Noyes :

Q. In making this distribution of freights, do you make it for
other than the trunk lines ? A. Yes, sir ; every road in the
country, that is connected with the trunk lines is interested in
it ; each of them must have their slice, or else they would go
in and cut the rates ; the principle is that all must be satisfied
by getting their share of the business ; the competition
comes in there ; if it was simply a matter between the four
trunk lines, it would be very simple, but it embraces all the
other roads in the country.

By Mr. Blanchaed :

Q. Don't the Fitchburg and the Boston and Albany and the
Grand Trunk pay a portion of your office ? A. Yes, sir ; the
Fitchburg pays, and the Grand Trunk ; no, the expenses have
not been assessed upon them yet ; that is an open question
which I want to bring before the Executive Committee to
settle.

Q. Will you be kind enough to explain to the Committee
your connection with the Southern Railway Association, and
the method of doing their business ; of the expenses prior to
your connection with the trunk lines ? A. When I was Super-
intendent and Manager of the Louisville & Nashville Eoad,
I had a great many interviews with those Southern roads
to stop this competition between them, as has been already
alluded to, and the same condition of affairs existed there as
have existed here ; I was then directly interested in the
management of the one road, and I suggested to them a plan

573

by wMch to prevent this competition and the difficulties that
arose from it.

Q. Was that plan stated in writing? A. It was, and is pub-
lished here in Mr. Nimmo's report ; the letter I addressed to
them, on which the whole arrangement was afterwards based,
and I would like to read it very much, if you would permit
me to.

Q. Is it long ? A. No, sir.

By Mr. Steene ;

Q. Several pages, perhaps ; cannot it be marked in evidence
without sprea ling it on the lec-ords? A. The letter is not
here ; Iremeinbir now, it is in aiio! her publication; the consti-
tution of that Southern liailway Association and the agreement
between those sonthe u roads is heie, and an explanation of
the same, which is not very long.

By Mr. Blanchaed :

Q. Will you produce a copy of that communication on which
the Southern E, dlway Associitio:! is based? A. Yes, sir.

Q. Generally, was the basis of that association the division
of the tonnage? A. Yes, sir; it included that, but that was
not its main feature ; that was the metLod in which it
operated.

Q. It was not like the Trunk Line Division of westbound
traflfic ? A. It was the same.

Q. Will you put in the papers relating to that association,
and the manner in which the traffic was divided 7 A. Yes,
sir ; I must say there was no especial basis ; there was certain
divisions made upon the same principle as they are made here ;
that is what you mean, I suppose ; did you want me to state the
general principle of that association ?

Q. Yes, please ? A. It was simply this, that those compa-
nies came together and formed an association, subscribing the
rules under which they would operate with each other, ap-
pointing a general commissioner to represent the interests
of all the roads.

Q. How many roads ? A. There are about twenty-five
roads in that compact ; of course the twenty-five were not all
interested in that same traffic always, but there might be a

574

group of five or ten interested in a special subject ; they came
together and arranged their affairs with each other, and in case
they could not agree, they submitted the question of difference
to the commissioner, who arbitrated, with the right of appeal
to the board of arbitration, il the decision of the commissioner
did not satisfy them.

Q. You will explain that fully in the papers put in ? A.
Yes, sir ; I think that will be fully explained.

Q. Now, confining ourselves first to the westbound trade of
the seaboard cities and the trunk lines, and dealing not at all
with the eastbound traffic until we come to that part of it, will
you please state whether the fast freight lines, or their agents
or managers, have anything to do with making westbound rate
of contracts or not ? A. They have theoretically nothing to do
with it ; it is not their business to do it.

Q. Are not all the instructions you give given direct to the
railway companies themselves ? A. Yes, sir; the instructions
are that they must not do it ; I have a copy of those instruc-
tions here, if you wish them.

Q. The fast freight lines, then, are not recognized by you at
all, except through the officers of the railway companies ? A.
Yes, sir.

Q. They have no rate making powers or contract making
powers, and do not change classification, or do anything except
by the orders of the railroads ? A. That is so.

Q. I simply asked the dealings of your office with those
people ; you say you have copies of those instructions ? A. • I
believe so ; they are here.

(Instructions produced.)

Q. Then no rates are made by the agents of these fast
freight lines, that ever come into your office, by the authority
of those agents, unless confirmed by the authority of the
railway companies over which the fast freight lines run ? A.
They have no authority to make any rates; they are forbidden
to make rates according to the arrangements that exist between
the trunk lines as far as I am concerned in the matter.

Q. Have you any powers as commissioner of the trunk lines
to make or change rates at all ? A. Not at all ; I have no
power in this matter, except what is conferred upon upon me

575

by the four trunk lines ; they furnish a representative to form
the joint executive committee, and the joint executive com-
mittee is the rate making power for the trunk hnes ; I am
acting as the Chairman or the Commissioner of that Com-
mittee, and in case of disagreement, according to the rules
under which we work, the same as in the Southern Railway
Association, the differences are to be settled by the judicial
decision of the Commissioner, in case there are any.

Q. You have acted during your commissionership as the
Chairman of the Trunk Line Executive Committee? A. Yes,
sir.

Q. Have you, or not, heard any discussions of that com-
mittee in relation to fixing the westbound rates, questions
discussed bearing upon the relative position of all the seaboard
cities to each other, and the general basis of facts arrived at
in making westbound rates ? A. Certainly'.

Q. Do you believe as an expert, that in discussing those
questions they have been discussed with reference to the best
good of the public as well as the railroads in respect to these
rates ?

Mr. Sterne — I object to that ; let us have the discussion ;
we can determine the question.

Q. Was or was not the relation of the railroad to the public
and the public to the railroad considered in making these
rates ?

Mr. Sterne — I object to that ; it seems to me an improper
conclusion to ask from this witness what the impression was
that was created on his mind by a particular discussion ; it
seems to me we can have the discussion and make up our own
minds on it.

The Chairman — The question was whether that matter was
discussed in determining the rates ; he can answer that cer-
tainly.

Q. Please give the subject of those dissussions.

Mr. Sterne. — That is fair, if he can possibly do that.

Q. Answer the other question first, please ; were they dis-
cussed ? A. The subjects were discussed.

Q. Please give the substance of these discussions ?

Mr. Steene — Just tell us if you were present ? A. I can
only say these subjects were discussed with a view to the
rights of the different seaboard cities, the relative advantages

576

of the cities ; they were always defended and guarded by the
roads representing these cities, the New York roads, working
for the interest of New York as fully as if thty owned the City
of New York, and all the merchants in New York, and had
their life and property depending upon the growth and pros-
perity of New York.

Mr. Steene — You don't give us the substance of the dis-
cussion ; I move to strike all that out.

The Chairman — I think your examination was in reference
to this, not with (his witness, but with their other witnesses;
you asked Mr. Austin the effect of this discrimination upon the
commerce of New York, and the growth of New York, etc.; I
think we sJiall have to let him answer the question.

Mr. Stehne — But he is not answering the question ; he is
asked to give the substance of the discussion ; now, he answers
and states what the motives of these people were? A. That
is the substance of the discussion that I gave you ; it is the
principle upon which the discussions were carried on.

Q. That is it; you are giving the priiiciple of the discussion?
A. I cannot give you the words, but I give you the results ; the
results, and not the words in which it was carried on.

Mr. Steene — You are not asked to give the result of the
discusi^ion or what influenced the people who were discussing,
but the substance of the discussion? A. I think I have stated
that.

Mr. Blanchard — I want Mr. Fink to state what considera-
tions were discussed, and what deteim'ned the general policy
of making these rates with reference to the difl'erences between
seaboard cities and the rates thems* Ives upon diffc rent classes,
and determining questions arising under the classification.

The Chairman — That is projier.

A. I did not state, as I remember, any motives ; I said that
was the principle that guided all the discussions on that sub-
ject, and that was carried out in the action to guard the best
interests of the railroads ; to give you the precise conversation
and the words in which that piinciple was embodied, I could
not do, but the acts of that Committee are in conformity to the
principle that I have stated : to guard the iutertsts of the City
of New York to the fullest possible extent.

Q. Have or have not the Executive Committee received
verbal and other communications from representatives of

577

various trades in New York at different times, and have they
not acted upon those and made changes to meet the wishes of
various trades ? A. They have ; in a great man}- instances
they have made changes not only in rates but in classifica-
tions to meet the representations of the merchants of New
York.

Q. They have always considered the applications made for
change in classification and rates ? A. Yes, sir.

Q. Have you not considered it a part of your duty to give
hearing, and present for the consideration of the Executive
Committee, all requests and considerations of that character ?
A. So it is ; yes, sir.

Q. In making these westbound rates from the City of New
York, have you been present at all the discussions that have
been had on the subject ? A. I think so.

Q. And all the changes of rates and classifications ? A.
Yes, sir.

Q. Have you been present when the representatives of the
New York lines have protested against any reductions on the
part of the Grand Trunk Company from Boston ? A. Very
often ; yes, indeed.

Q. Were those changes made by you as Commissioner, in
consideration of what you regarded as the equities of the
case, as an arbitrator, to decide the Boston question ? A. Yes,
sir.

Q. They agreed to leave the question to you without as-
senting on the part of the Erie or New York Central to any
differential rates out of the City of Boston ? A. They always
protested ag9,inst it.

Q. They had agreed to be bound by your decision as arbi-
trator, when you decided the Boston question in favor of the
Grand Trunk Eoad ? A. They assented to it very unwillingly ;
I considered that the only mode in which it could be settled.

Q. (By the Chaieman.) That is what I want to know,
whether they assented to it before you decided the question or
afterward ? A. Whenever I speak to Mr. Butter about differ-
entials, he gets mad every time, and yet it is the only way to
settle it.

Q. Do you know how many stations the Boston & Albany
road has in Boston, in which it receives westbound freight?
A. I do not ; they have at least two or three, I believe.
61

578

Q. Do you know how many the Fitchburgh road has? A.
I do not.

Q. Do you know how many the Pennsylvania road has in
Philadelphia? A. They have a great many — about eight or
ten, I beheve.

Q. Do you know how many the Baltimore & Ohio road has
in Baltimore ? A. Only one, I believe.

Q. Do the roads at Boston, Philadelphia and Baltimore,
receive at any point except at their railroad termini — at any
point except at the termination of their rails — they receive
property at tlieir stations, their depots, in other words? A.
I suppose they receive it all at their depots ; I don't know any-
other wa3\

Q. In any of those cities do any of the carriers incur the ex-
pense which the New York Central and Erie, the Pennsylvania,
the Baltimore & Ohio, incur at New York, in addition to the
usual haul from Jersey City, from Thirty-third and Sixty-fifth
streets, and from Long Dock? A. I believe not; New York
is differently situated in that respect; the terminal expenses,
of course, are higher here than ordinarily ; there may be other
places similarly situated, but I don't remember now any
particular place ; I don't know all the localities of the depots
of all the roads.

Q. Then, so far as you understand it, keeping this inquiry
now to westbound freigh's exclusively, the roads at New York,
in addition to their usual termini, where tlieir cars come into
their depots, inciir an expense for lighterage in hauling about
the harbor and delivering at supplemental stations, that are not
incurred at any of the other seaboard cities?. A. I could not
be positive about it ; so far as I know, that is the case.

Q. Assuming that to be the case at these other cities, doesn't
the service of going to Brooklyn and Williamsburgh and
Hunter's Point and Staten Island, and to various docks in the
City, and to the. docks of the steamers as they land here, and
taking that property on lighters over to Jersey City or Thirty-
third street or Sixty-fifty street or Long Dock, amount to just
that much more than is incurred by any of the other lines at
any of the other cities ? A. I think that is so.

Q. Then there is no such expense, I understand you, either
at Baltimore or Philadelphia? A. Not that I know of.

Q. Have you heard the testimony as to the cost paid by the

570

New York Central for that service? A. I liave not ; I under-
stand the cost is three cents a hundred to deliver freight from
the warehouses in Brooklyn and other places to the depot
here.

Q. Mr. Eutter has testified the charge was sixty cents? A.
Sixty cents a ton.

Q. Now the average of rates upon property usually lightered
in that way — what is that equivalent to in mileage, in your
juda;ment? A. It is nearly ten percent, of the rate ; the rates
from Chicago have varied from thirty to forty cents ; three
cents would be, on that class of property — fourth class — from
ten to seven per cent, about, I believe, and the distance from
Chicago being 963 miles, 10 per cent, of that would be ninety-
six miles.

Q. Then I understand that practically a service is incurred
by the New York lines, that being the case, which is equiva-
lent to carrying property ninety-five miles, in addition to the
actual length of the respective railroads ? A. On a thirty cent
rate.

Q. And that would vary with the different classes and the
different rate ? A. Yes, sir. *

Q. When special rates were made from here at twenty cents
or fifteen cents upon fourth class rates, then that on the same
basis was equivalent to about two hundred miles ? A. When
it was fifteen cents it was twenty per cent.

Q. That was 190 miles, was it ? A. Yes, sir.

Q. And that much that the railroad companies are doing
for the City of New York, other cities have done by the citi-
zens themselves, as you understand it ? A. Yes, sir.

Q. I understand that at Boston freight is received by the
Boston & Albany road at its depots only? A. That is my un-
derstanding.

Q. That at Philadelphia it is received at the depots of the
Pennsylvania railroad? A. Yes, sir.

Q. At Baltimore it is received at the depots of the Baltimore
& Ohio ? A. Yes, sir.

Q. That they .do not at those cities pay lighterage? A.
not tliat I know of.

Q. It has never appeared on any of those statements you
have made on behalf of those companies ? A. No, sir.

580

Q. You tliink you would know it if that had occurred in
those cities? A. I think I would, but not necessarily.

Q. I have spoken now of business that is lightered ; do the
roads in the westbound tonnage division which you supervise,
receive the property at the stations on the New York side, St.
John's Park and Chambers street ? A. Kot for the Erie road
or the Pennsylvania road ; they do for the New York Central.

Q. I mean other than the lighterage freight, freights received
at St. John's Park, Chamber street. Pier 1, and the various
piers ? A. Yes, sir ; they always receive it on this side of the
river.

Q. And the tonnage division is made by you upon the report
of the agents at these stations on the New York side of the
river ? A. Yes, sir.

Q. Then, in addition to the expense which the New York
lines incur on freight deliveerd by lighter, to which I have be-
fore referred, do they not incur an expense upon all the bus-
iness received at the city in handling it on this side of the
river and lightering it across the river, and in taking it by
dummy engines to Thirty-third sti-eet, which is not, to your
knowledge, incurred at gther cities ? A. I cannot answer that
question, Mr. Blanchard ; in the city of Baltimore they have
depots there — I suppose you are familiar with that — where
they have to haul the freight to the outer station.

Q. At Mont Clair ? A. Yes, sir : they load in the city, and
then haul it by horsps.

Q. Not from Camden station ? A. Not from Camden sta-
tion ; I am not sufficiently familiar with the local conditions at
present.

Q. Then, there being two classes of freight in New York, the
lightered freight and the freight coming from the city proper,
what is your understandmg, as to freight, .that is imported
through Boston and Philadelphia and Baltimore ; do you un-
derstand that at the three latter cities the steamers land at the
railroad termini, and that no charge for lighterage from the
steamers to the railroad is incurred ?

Q. (By Mr. Stebne.) Does the witness know ? A. I under-
stand it is lightered from the steamers to the railroad company
but it is a question, perhaps, that you could bring out much
better by Mr. Crawford or somebody else, because I am not
familiar with the local positions.

581

Q. You are familiar with the position at New York ? A.
Yes, air.

Q. At New York do the raih'oad companies receive freight
at the steamer's dock and take it to their respective stations ?
A. That is my understanding ; that they pay the lighterage.

Q. Then, on the foreign freight also passing through the
City of New York, they incur the same additional expense as
compared with the steamers and rail at the other cities ? A.
That is my understanding.

Q. Have you any means of estimating upon the westbound
traffic of Ne(v York what amount of money was paid out by
the railroads in the westbound tonnage division for these ser-
vices, which would not be incurred at other cities? A. I
have not particularly estimated it ; but from general knowl-
edge of circumstances of that sort I have always considered
that it was worth from sixty cents to a dollar at least, a ton —
the terminal expense here in New York.

Q. Now, will you be kind enough to state to the Committee
the number of tons of westbound freight carried under your
pooling arrangement last year? A. I have not the last year;
I have a statement here for 1878, I believe — 741,784 tons.

Q. Does that include traffic which went from New York by
canal ? A. It does not.

Q. It is only the railroad tonnage ? A. Only the raih'cad
tonnage ; it is the tonnage of the four railroads and not the
tonnage of other roads not included in this compact.

Q. Does that include traffic which went from here by the way
■ of New London or Portland by the Grand Trunk ? A. No,
sir.

Q. Or does it include traffic by the way of the Chesapeake
& Ohio? A. No; it does not include any other lines but
the four trunk lines.

Q. Does it include the traffic going from here by the way of
Charleston and Savannah, or by steamer to New Orleans and
the other cities ? A. It docs not ; only by the four trunk
lines running out from here.

Q. Have you the statistics of the Boston traffic of last year
and that from common, interior New England points ? A.
Yes, sir.

Q. Please state them. A. That was 203,793 toUs; I can
give you Boston separately from the New England points.

582

Q. How much is Boston ? A. 162,626 tons.

Q. How many other points does the residue of the tonnage
embrace ? A. There are about seven or eight points, I
think.

A. And these seven or eight points — state not only the
business originating from those points but anything passing
through there coming from others and billed from them ? A.
Yes, sir.

Q. What was the westbound tonnage from Philadelphia in
the year 1878? A. 198,192.

Q. How much was it from Baltimore ? A. 131,040.

Q. How much from Boston proper, Philadelphia and Balti-
more, last year, as compared with New York ; first, what is it
from Boston ? A. 491,858 tons ; that is from Boston proper,
and from Philadelphia and Baltimore altogether, as against
741,784.

Q. What is the excess of New York over those three cities ?
A. 250,000 tons ; that does not include the canal.

By the ChaIeman :

Q. I understand you to say the westbound tonnage at Bal-
timore is 203,000 ? A. That is wrong ; that was Boston and
certain competitive New England points,

Q. Give me Baltimore, please ? A. 131,000.

By Mr. Blanchaed : ' '

Q. Now, I understand that includes the railway traffic for
the triink lines, for which you were acting as Commissioner,
and the Grand Trunk road out of Boston ? A. Out of Boston.

Q. It includes nothing else ? A. Nothing else; of course it
includes the Fitobburg road which delivers its freight at
Albany to the New York Central.

Q. That includes business to and throughout all the western
terminal stations of those companies ? A. Yes, sir.

Q. And none but that ? A. All business of that kind ; I
don't think there is any other shipmpnt made to those western
points out of Boston.

Q. And nothing bat that ? A. Nothing but that.

Q. It does not include anything shipped from New York to
Rochester by the New York Central or Erie ? A. No, sir ;
no local point.

583

Q. Nor from Philadelphia to Harrisburgh ? A. Nothing
local.

Q. And nothing from New York to local stations ? A. No,
sir.

Mr. Steene — It includes Canadian points ? A. All Canadian
points.

Q. Does that business from New York include any canal
at all? A. It does not ; I have been unfortunate; I cannot
get the 1878 canal reports ; whether they have been issued or
not, I don't know ; I would like very much to get the canal
report for 1878, but the report is not published ; I will state,
that in i877 the we-stbound canal tonnage, according to the
report of the Chamber of Commerce, amounted to 978,991 tons ;
in 1878 there was an increase over 1877 — a large increase on
the canal business ; you see the canal business amounts to
nearly a million of tons, while all rail business is 741,000 tous.

Q. The rail business was about three-fourths the business of
the canal? A. Of the canal proper; yes, sir.

Q. Will you please now add the traffic of the canal to that
of the trunk lines under your commissionership, and give us
the comparison with the other seaboard cities by rail ? A. I
can only estimate it.

Mr. Sterne — Wait a moment ; the western bound traffic on
the canal ?

Mr. Blanchaed — Yes, sir.

The Witness — I have not got the westbound report for
187s yet.

Q. Do I understand that is the entire traffic on the canal ?
A. Oh, no ; it is westbound from tidewater; it is so reported in
the report of the Chamber of Commerce for 1877, page 192 ;
I cannot add 1878 to it, because I have not got it.

Q. Have you the rail figures for 1877 from all the seaboard
cities ? A. I have.

Q. Please state those ; how much fi'om Boston ? A. From
Boston and competing points

Q. From Boston alone? A. I cannot give you that separate
for that year.

Q. Could you separate it at your office ? A. No, sir, I can-
not ; I have not got the necessary data.

Q. Assuming that the westbound tonnage from New York in
1878 by the canal was what it was in 1877, will you please add

584

that to the rail tonnage which you supervise as commissioner
and state the excess over the combined rail tonnage of the
other seaboard cities ? A. 1,228,0(10 tons ; the total of the
other cities being about a half a million, and this is the excess.

Q. What was the total of New York — canal and rail; give
us New York alone, please ? A. 1,720,000; I only state the
tons in round figures.

Q. Aud the other cities combined ? A. The other cities
combined is 491,000 tons.

Q. Then New York is more than four tinaes as much by
canal and rail as all the other seaport cities combined ? A.
Yes, sir.

Mr. Sterne — Westward bound ? A. Yes, sir.

Q. Now, I understand that this business does not include
the trafhc of the Ches'apeake & Ohio, of the Virginia and the
Tennessee lines ? A. Not at all.

Q. Aud none of the steamship lines running from New
York to any of the coast cities or the Gulf cities ? A.
No, sir.

Q. Does the rail pool include traffic going from here to
Buffalo and Erie, and thence by lake ? A. Yes, sir.

Q. The same as to other cities ? A. Yes, sir.

Q. Has the making of a pool, on the part of the four trunk
lines, in your judgment, increased the business of the Chesa-
peake & Ohio, and of the Virginia and Tennessee road? A. I
think it has; they were entirely out of the market when the
rates were very low, and they are now doing a respectable
business.

Q. And the merchants of New York still have the advantages
of those lines to many points, if they feel dissatisfied with
the results of the New York pool ; that is on the south ? A.
Yes, sir ; they ship from here to Norfolk, from Norfolk to
Chattanooga, from Chattanooga to Hickman, Kentucky, from
thereby the Iron Moirntain Railroad to St. Louis.

Q. From Nashville to Memphis? A. They ship also to
Nashville and Memphis in competition with the trunk lines.

Q. And if the commercial public of New York feel they can-
not pay the charges of the New York freight division they can
avail themselves of those routes at cheaper rates ? A. They
all work cheaper ; yes, sir.

Q. And by caual on the north . and the lakes they can

585

do tte same, and the amount of tonnage would appear to
indicate they had done so ; does that statement include the
traffic of the Grand Trunk Eoad ? A. It does not.

Q. From here to New London or Portland ? A. No, sir.

Q. Does the Grand Trunk Eoad report to you the tonnage
sent by the way of Portland ? A. They do.

Q. But not for the use of this pool ? A. No, sir ; it is a
private arrangement.

Q. You have not added that tonnage ? A. No, sir ; because
they don't wish me to publish the statement.

Q. Have you any knowledge as to the relative amount of
traffic going from Boston and Philadelphia and Baltimore by
lines not included in the westbound division in your report ?
A. From Philadelphia and Baltimore there is no all-rail freight
being sent except that which goes through this report ; we
have, of course, the southern trade which does not go in here
— the trade from the south.

Q. Are there as many steamship lines running from the
other cities that carry freight, not going into this pool, as
there are from New York. A. I suppose not, at first glance ;
I am not positive.

Q. Have you any means of ascertaining the total westbound
shipments of all lines in and out of the westbound division
from New York, Philadelphia and Boston so that this com-
parison may be made complete ? A. No, I have no means of
knowing the steamship lines ; I have the means of knowing the
business done by the Savannah and Charleston steamers from
here.

Q. Does that show an increase in 1878 as compared with
1877 ? A. That I have not examined ; I could examine them.

Q. Then I understand you that, leaving out all these outside
channels of traffic, the New York business by canal and rail
was more than foui times as much as all the other seaboard
cities combined ? A. Yes, sir ; as 491, COO is to 1,720,000.

Q. And the percentage from New York on westbound was 73
or 74 per cent, of the entire westbound traffic of which you
have reports and knowledge ? A. Yes, sir.

Q. Since you became Commissioner, has the European
freight arriving at New York and sent west by the lines for
which you act been charged the full New York schedule rate

586

upon all freight arriviug froni all coastwise and foreign points
or not ? A. That is the evidence in my office.

Q. If the rate from here to Chicago was forty cents per
hundred po'.mds upon fourth class freight, originated by
H. K. Thurber & Co., going from New York as fourth class
freight, arriving here from the ocean steamships, any or all of
it been charged at the same price from New York to Chicago ?
A. It has £0 far as the evidence in my office goes.

Q. And to all through points, so far as the evidence in your
office goes ? A. Yes, sir ; and not only that, but I wish to
say if it had not been so charged — if they had not charged
full rates— it would have been to the disadvantage cf the line
that carried it for less, because they would have lost that much
of the city freight under this present arrangement.

Q. Have you ever had occasion to ask the trunk lines ,
whether or not outside of your office they were making any
allowance ? A. I have often asked them ; I have had occasion
to investigate the matter, and to my knowledge and best belief
they have strictly adhered to the charges.

Q. During your Cammissionership have you been present
as Chairman of the Trunk Line Executive Committee when
this question of rates from Liverpool and foreign ports to in-
land American cities was discussed? A. I was present at a
great many occasions, of course.

Q. Was it stated at any of those meetings that the reason
why this property was carried through New York at low rates
was because of an arrangement existing between the Allen
Line from Glasgow and Liverpool to Montreal, and thence by
the Grand Trunk Road and St. the Lawrence river ? A. It
formerly had been so,

Q. Did they continue to do that to your knowledge, after you
became Commissioner? A. They continued to do that in Bos-
ton for a certain length of time, and they may continue to a
certain extent to do it now, but they have agreed not to do it,
or rather to keep up their rates, to conform as near as possible
to the New York arrangement, that is, that they should charge
full inland rates.

Q. Does that same rule apply to Portland and Quebec and
Montreal? A. They don't apply the same rule, and those roads
have not agreed to apply the same rule, but they have agreed
to apply it to the fullest possible extent ; they claim they labor

587

under the greatest disadvantage there, and cannot charge the
same rate at those points as is charged by New York, and they
take the same position in that regard as they do in Boston in
regard to the other inland business, but they have, as a rule,
conformed to the New York rates, very nearly.

Q. Have you had occasion to know since you became Com-
missioner, whether or not the Grand TrtiTik Road inaugurated
the system of getting through bills of lading and rates from
England and continental points through to inland American
cities ? A. I don't know the history of that particular trans-
action prior to my coming here.

Q. Has it ever been shown to you in these discussions at
your office, that because the Grand Trunk Road did do that,
or because they were charged with having done it, that the low
rates made by the New York lines before the pool brought
back to New York a considerable part of that foreign tonnage
that formerly went through Montreal? A. Necessarily so ;
that would be the effect ; the low rates that were made from
New York I understood from the general discussion of the
subject, were necessary to meet the competition of the Grand
Trunk Eoad by their northern ports.

Q. As the result of that determination, has not this foreign
business continued at full rates in larger proportions through
New York thanjbefore ? A. I have no comparison of the for-
eign business before the present arrangement was made; I
could not answer that question.

Q. What is your opinion ?

Mr. Sterne — If he has not anj' knowledge he cannot answer
it.

A. I have no statistics on that point.

Q. Could you procure them ? A. I have now the amount of
foreign business passing through New York and the different
ports for a limited time ; since the first of March from the
other ports ; from New York I have it for five years.

Q. How does that compare with the other ports ? A. I
think in regard to Baltimore and Philadelphia it is much
larger ; I am not prepared to say what it is in regard to Bos-
ton ; I have not made any comparison.

Q. Do you know what the differences were in westbound
rates prior to the agreement which you have submitted in
evidence here, as between the seaboard cities, by the different

588

lines ? . A. Prior to that agreement, my knowledge was that it
was ten cents and five cents ; the second and first class ten and
the others five.

Q. Where was that, Philadelphia? A. Philadelphi.

By the Chaieman :

Q. So much cheaper you mean than from New York? A.
Yes, sir.

By Mr. Blanchard :

Q. Were not the old difi'erences from Philadelphia 15, 10. 8
and 5 cents ? A. I really don't remember now ; I have a recol-
lection of its being ten and five cents, Mr. Blanchard ; but
immediately before, I do not know what they were ; I think,
my opiuion was, that in 1876 it was ten and five cents, but I
may be mistaken.

Q. What classes were those ? A. I think the first and sec-
ond were ten cents.

Q. Instead of how much now .- A. Instead of eight and six
cents, the average being now seven cents, and then it was ten
cents.

Q. You mean eight from Baltiuiore? A. Yes, sir ; first class.

Q. And how much from Philadelphia, fourth class? A.
From Philadelphia the difference is six, I think, first class,
and four and two cents fourth class.

Q. And the old difference you understand is five cents? A.
The last class.

Q. The difierence then now, is only forty per cent, as agaiust
New York to what they were then ? A. Yes, sir, I know it was
at least that much ; but you stated more, and your information
is better than mine.

Q. According to your information, the difference against
New York has been reduced sixty per cent ? A. Yes, sir.

Q. What was the fourth class then from Philadelphia? A.
Five cents.

Q. How much now ? A. Two cents.

Q. The reduction then has been sixty per cent, in favor of
New York ? A. Yes, sir ; in that proportion.

Q. Will you procure and give to the Committee the differ-
ences in rates that have existed westbound from New York as
compared with these other cities, since the year 1870 ? A. I

589

don't know except I get it from you or somebody ; 1 don't have
that information in my office ; I think that is piiblished in the
report of the Chamber of Commerce ; the Transportation Ee-
port, of which Mr. Thurber has sent me a copy which shows
the diffeience prevailing in 1874 and 1 875 ; the differences were
much greater ; I think I have a memorandum here ; I see
here, in " the report of the Chamber of Commerce of February
last, copies of a tariff are published, which was issued as therein
stated, in November, 1875, showing a discrimination of from 25
to 133 per cent, in favor of Philadelphia and Baltimore ; I
don't know whether this tariff was ever enforced, but it is well
kuown that no shipments have beea made under it since the
spring of 1876, and the present tariff, which took effect at that
time, shows a reduction of 15 to 123 per cent, upon the dif-
ferences named in the above mentioned report ;" the reduc-
tions in the differences have been from 15 to 123 per cent.

Q. Now, the differences you have stated from Philadelphia
and Baltimore are respectively six and eight on first class, and
two and three on fourth class and intermediate differences on
intermediate classes ; now what is the difference in distance
from New York to Cincinnati, as compared with tlie distance
from Baltimore to Cincinnati? A. The distance from Balti-
more to Cincinnati is 33 per cent, less than it is from New
York to Cincinnati.

Q. Will you state as the basis of the westbound rate from
New York to Chicago, how the mileage is arrived at ? A. The
present arrangement or the former ?

Q. The arrangement under which you have acted ; is the
mileage an average of the distance of the different lines ? A.
It is.

Q. Do 3'ou know any reason why in establishing the rate
from New York to Chicago, simply as a unit or basis of the
rate to western points the shortest line should always be
taken? A. There is no agreement on that subject at all ; it is
a question that is very much agitated.

Q. If the New York Central and Erie roads carried sixty
per cent, of the westbound business, should not their dist-
ances be regarded in making rates from New York to Chicago ?
A. Certainly.

Q. Do you regard it as an equitable arrangement that the
average of the distances of the three trunk lines from New

590

York to Chicago should be taken as the basis upon which to
make up the rates? A. That is about as near as you could
come to a correct conclusion just to all parties.

Q. And you would regard it as proper from the other cities
as well ? A. I think so.

Q. "Will you please to furnish to this Committee a statement
what you, as an expert, regardas the average distance from each
one of the seaboard cities to Chicago, St. Louis, Louisville,
Cincinnati, Indianapolis and Detroit ? A. I have got that
from the statements ; I cannot give it to you here.

Q. Will you also furnish both the shortest and the longest
distance by rail from each one of the seaboard to each one of
those cities ? A. I will.

Q. Without consuming the time of the Committee, were
your views as to the alleged discriminations in distances
from the seaboard cities, as opposed to New York, embodied
in a letter dated New York, June 20th, 1878 ? A. Yes, sir.

Q. You still hold these views ? A. Still hold these views.

Mr. Blanchard — Mr. Chairman, I offer this letter in
evidence.

(The letter of Albert Fink to the Chamber of Commerce
received in evidence, and marked "Exhibit 1, June 21, 1879.")

Q. During your commissionership have you ever had occa-
sion to examine, since the operation of the freight division,
the aggregate charges on foreign freights westbound from
Liverpool as an example to Baltimore, plus the rail rate from
Baltimore, as compared with the ocean rate to New York, plus
the rail i-ate from New York to the same western point? A.
You mean the local ocean rate to New York ?

Q. Yes. A. No ; I have not compared the local ocean rate
with the through ocean rate.

Q. Have you ever had occasion, I mean, to examine the rate
from Liverpool to Baltimore added to the rate from Baltimore
to Cincinnati, making it a through rate as compared with the
rate from Liverpool through New York, making it a through
rate ? A. No, sir ; I have not compared those.

Q. Have you any statistics to show whether the rates are
the same from Baltimore and New York ? A. I can only say
that the inland rates are the same on European business as
on local business.

S91

Q. Do you know if the ocean rates to Baltimore is as miicli
higher as the rail rate is less ? A. My understanding is that
the ocean rate is higher as a general rule to Baltimore.

By Mr. Sterne :

Q. Is it as miich higher ? A. No, I cannot tell that ; as a
general rule it is higher to Baltimore than to New York.

Q. Have you any personal knowledge on the subject? A.
No, I have got what I gathered from the discussion on the
subject.

Q. From the discussion of the Trunk Line managers ? A.
No ; from the examination of the subject of tariffs, and so on.

Q. Do you confine it as to time ? A. No.

Q. To what period of time do you desire to have your an-
swer confined because it is an important question ? A.
During the last year or two.

Q. You think during the last year or two the ocean rate
to Baltimore from Liverpool was as much higher — A. (Inter-
rupting.) I don't say as much higher ; I say it is generally
higher than to New York ; that is the claim that the Baltimore
and Ohio road has always put in as against the New York
roads.

Q. And it is on the basis of that claim that they insist upon
charging less rates ? A. That is one of their reasons ; but the
difference fixed in favor of Baltimore is not taken with a view
of foreign business at all, but simply taken because Baltimore
claims to be so much-nearer to the centres of the west than
New York.

Q. Let me draw yonr attention to these words, " To require
the New York roads to carry freight to and from the west at
a rate which would disregard the excess of the cost of trans-
portation from Pljiladelphia and Baltimore to and fiom foreign
ports, would give to the New York merchants such advantages
as would destroy the commerce of those cities ; their roads
would not submit to this, nor would those cities permit them
to tell that they had been exhausted in the struggle to main-
tain a fair equilibrium ; the New York roads have put this
city on an equality with the most favored rival ; to this position
they are thoroughly committed, and they will stand by itunder
all circumstances ; the rest remains with its merchant ;" this
is the statement made by one of the trunk line presidents as a

592

reason for the pooling ariangement ; is this correct or not? A.
As to the pooling arrangements ?

Q. Yes ; of which j^ou are Commissioner ? A. I don't un-
derstand it so as to the differences between Baltimore and
New York.

Q. Then the basis of the difference is to put New York and
Baltimore upon an equality as to ocean freights to and from
Liverpool ? A. I don't understand that that is the object ; it
says that it is so.

By Mr. Blanchard :

Q. Has or has not a committee been appointed since you
were Commissioner, to go to Philadelphia and Biiltiraore, and
examine the relative ocean rates to and from those cities, as
compared with New York? A. I don't remember that, Mr.
Blanchard ; not that I know of.

Q. Were not Mr. Hopkins, Mr. Mcllhinny, and others ap-
pointed a committee .'' A. They were appointed a committee
to arrange the relative rates and to fix the ocean rates.

Q. Were they not appointed to go there with the view
to ascertain how it ought to be done, and at the same time
procure the ocean rates ? A. They were appointed to have a
conference with steamship agents here, but I don't remember
that they were appointed to go to those cities, but they were
to confer with the steamshij) lines here for that purpose.

Q. Can you procure that information ? A. I think so, sir.

Mr. Blanchard — Will the Committee accept a table prepared
and certified by Mr. Fink?

Q. Have you any statistics in your office showing the dis-
tance from Liverpool to Chicago by the way of Baltimore, as
compared with the distance from Liverpool to Chicago by the
way of New York ? A. No ; I have not in my office.

The Chairman — I think so.

Q. Will you please give a statement showing the ocean and
rail distances combined, from Liverpool, through Montreal,
Portland, Boston, New York, Philadelphia, and Baltimore, to
Cincinnati, Louiville, St. Louis, Indianapolis, Chicago, Nashville
and Memphis?

The Chairman — You will please give it in connection with
the table of seaboard distances you were asked to give a short
time since.

593

Q. Were you ever connected with the Baltimore & Ohio
Eailroad ? A. Yes, sir ; in the construction of it.

Q. You are famihar with the construction of it and its
grades ? A. I am familiar with every foot of it west of Cum-
berland.

Q. Do you know the price paid by the Baltimore & Ohio
road for coal, as compared with that paid by the New York Cen-
tral? A. My information is that they get coal for about three
cents or four cents a bushel, delivered on the tender.

Q. That would be about how much a ton ? A. Seventy-five
cents to one dollar.

Q. Do you know how much the New York Central pay ? A.
I understand about sixteen cents a bushel.

Q. That is how much a ton ; that would be four dol-
lars a ton, wouldn't it ? A. Yes, sir.

Q. -Do you know whether the Baltimore & Ohio and Penn-
sylvania roads purchase cross-ties and lumber cheaper than the
northern lines or not ? A. On some portions of the road there
their cross-ties are much cheaper than they are on the New
York Central.

Q. Do you know whether or not in the mountain regions of
those States they pay less for labor than in New York ? A.
I think they pay rather less.

Q. Are the terminal expenses of these roads at Philadelphia
and Baltimore equal to those of the Erie and New York Cen-
tral at New York ? A. Well, I am not familiar with the present
terminal arrangement of those roads ; it is many years ago
since I was connected with them ; my information is that they
are.

Q. How far do you regard the difference in the cost of fuel
lumber, cross-ties and labor, and the other advantages they
possess, as offsetting the difference of grades ? A. Well I can-
not say the exact percentage without calculating and estimat-
ing and I have not got the necessary data to do it with.

Q. What is your opinion? A. I might make this estimate
roughly ; suppose that they consume on a train froii) sixty to
eighty pounds of coal to a mile run ; now you can make out the
difference in cost at sixteen cents a bushel and at four cents a
bushel for a mile run of train ; if you wish me to make these
calculations I can make them, but you can estimate the differ-
ence between sixteen cents and four cents a bushel.
63

594

Q. Estimatiug coal at twelve cents a bushel on the one and
four cents on the other

By Mr. Stekne (Interrupting) :

Q. Do you know it is four now ? A. Yes, I think it is not
more than four.

Q. Don't they own the coal mines ? A. They own some, I
think, or have a contract with the miners.

Q. Then you would have to know how much they expended for
their coal mines in order to tell this ? A. You can judge what
difference it makes in a mile run ; you might I'educe it to that,

Q. The computation is of no value unless we have the ele-
ments of the cost ?

By Mr. Blanchakd :

Q. As a general question from your knowledge of the Balti-
more & Ohio road and your acquaintance with the New York
Central, is it your opinion that the saving in the price of coal
offsets the difference in the grades ? A. I would not say it does,
but it goes a long way towards offsetting the grades.

Q. Will you please ascertain those facts — the cost of coal,
labor, cross-ties and material, the leading articles as to that
point, as to overcoming the 'difference of grades and curves ?

The Chaieman — And compare them with the grades on the
two rotids and estimate the difference.

A. I will make an estimate of it as near as I can ; I will
have to know the consumption of coal on the New York
Central.

The Chairman — These people will furnish you any informa-
tion they can, of course.

Q. You testified that you were connected with the Louisville
& Nashville road ; did that line run parallel with water courses
or compete with water courses ? A. No ; the main line was
almost a local road undisturbed by any competitive roade or
water courses ; there are some other portions of the road that
were influenced a good deal by water transportation.

Q. Did you cross the Cumberland and Tennessee rivers ? A.
Not with the Louisville line biit we crossed it with the Mem-
phis line ; the Memphis line was cut up in a great many com-
petitive points ; the main line was not.

595

Q. Did the main line run from Louisville to Memphis ? A.
Tes, sir.

Q. Did you compete for that entire distance with the Ohio
and Mississippi rivers ? A. We did.

Q. Did you make changes in your rates between Louisville
and Memphis, and between Memphis and Louisville, according
to the difference in rates on the rivers ? A. Certainly.

Q. Did you at the same time when you made those changes
in through rates make corresponding changes in your local
rates ? A. Generally, when the difference became consid-
erable, changed local rates to suit.

Q. When they were not considerable ? A. Generally adopted
a rule that we would not charge for longer distances more
than for shorter ; that was merely a general rule that we tried
to observe ; we did not, of course, and could not observe it at
all times, but that was the principle we tried to carry out, and
in regard to some articles of shipment, it was not carried out
at all ; cotton for example ; we carried cotton in competition
with the river at a much less rate.

Q. Did you make the same rates from local stations for
shorter distances — as from Louisville to Memphis ? A. On
cotton we could not do it ; we endeavored to do it on merchan-
dise, where the competition on the river was not felt so much.

Q. Did you make special rates between Louisville and the
points where you crossed the Cumberland and Tennessee rivers?
A. We kept our tariff low, of course, to those rivers, and then
raised it beyond there again, as rapidly as we could ; the
general principle we observed, wns that if the rate to Mem-
phis was very low, on account of river competition, we made
the rate to a station this side of Memphis — a shorter dis-
tance— about the same as the rate by river to Memphis, and
then the rate from Memphis to that station.

Q. (By Mr. Sterne.) — Isn't that all set forth in the argument
just now marked as an exhibit? A. That is cited as an in-
stance ; a general illustration of the subject of making rates.

Q. Where did you leave your main line on the route to New
Orleans ? A. We had two routes to New Orleans ; one
went by Montgomery, that took in the whole line ; the other
went by Memphis.

Q. Did you always or ever carry for the citizens of Bowling

596

Green, merclianclise at the same rate as the New Orleans
rate ? A. No, indeed.

Q. Did you charge more between Louisville and Mont-
gomery, than your proportion of the rate from New Orleans to
Louisville ? A. We charged a great deal more.

Q. Then I understand you made special rates on the Louis-
ville and Nashville roads, to points where you had competition,
that were lower, both per mile and per hundred pound, than
your proportion of the through rates ? A. Yes, sir.

Q. (By Mr. Sterne.) Special lower tariif rates ? A. We
made special rates from time to time, to cover competition —
temporary competition — but it was given generally to all
parties alike.

Q. (By Mr. Stekne.) It was a special tariff? A. Sometimes
it was made with one or two persons, just as in any other part
of the country, with the understanding others could have
those rates.

Q. When you made the special reduction between points
on the river and rail, did you also publish the tariffs ? A. No^
sir.

Q. When you made those rates at points on the river or
rail, did you issue a new locrl tariff? A. No, sir.

Q. You made them in the form of special rates and recorded
them in a book, just as has been done by the Brie and New
York Central ? A. Yes, sir ; it that was necessary ; at Mem-
phis we never could have any fixed rates, while the rates
at the intermediate points were always according to the
tariff rates, as near as we could maintain them.

Q When you made a cotton rate from Memphis to New
Orleans, cotton was in wliat class? A. Fourth class; there
were special rates made on that.

Q. Was the proportion you received from Memphis to
Louisville less than the rate you would charge on fourth class,
local freight from Memphis to Louisville ? A. We carried no
cotton from Memphis to Louisville.

(^. Was your proportion of the rate made from Memphis to
New York — accruing to your company — less than you. charged
from Memphis to Louisville ? A. Our charge to Louisville
was higher than the proportion of New York through rate.

597

By Mr. StesnE :

Q. The New York through rate ? A. Yes, sir ; is that what
you want ?

By Mr. Blanchard :

Q. Yes, sir ; the same is true as to Baltimore and Phila-
delphia ? A. Yes, sir ; the same is true of all competitive
business.

By Mr. Depew :

Q. Do you understand that legislation affecting the trans-
portation interests of one State, a commercial State like the
State of New York, and not uniformly adopted in other States
so as to affect their rate, would injuriously or favorably affect
the commerce of New York ?

Mr. Sterne — I object to that ; it is not a proper question.

Mr. Depew — I will put it in another form.

Q. Suppose the State of New York should pass a statute
prohibiting special rates, and prohibiting the charging of any
more for State freight than its proportionate part of what it
charged for any through freight that might come — other States
not adopting any such legislation, or Congress not adojDting
any such legislation, that legislation being solely in the State
of New York, what would be the effect of that upon trade
through the State of New York ?

Mr. Sterne — I object ; I don't think that is a proper ques-
tion.

Q. Suppose such a statute as I have just stated to exist in
the State of New York, it would apply to only the New
York Central Eoad

Mr. Sterne — That I object to.

The Chairman — He has testified to that already practically
in your examination.

Q. the other roads running out of the State being able

to evade it in the other States ; now, if the regular rate from
Chicago on flour, for instance, was fifty cents a barrel, and
from Rochester a proportionate rate, a railroad war breaks out,
and the rate from Chicago on flour becomes ten cents a barrel;
the New York Central, under such circumstances being com-
pelled by that law to reduce the rate on flour in the State of

598

New York to a proportionate figure, or, in other words, to a
minimum or no figure at all, would decline the through busi-
ness, and do only the State business ; therefore it would charge
the State miller its regular rate, say from Rochester twenty
cents a barrel ; now, if the other roads out of the State charge
ten cents a barrel to New York, and the New York Central
under such circumstances charge twenty cents a bai-rel, what
benefit would the Eochester miller derive from the law ?

Mr. Steene — That I object to as an argument.

The Witness — You can ask me what I would do in the man-
agement of the New York Central Eoad.

Q. I ask you, as an expert, if you were the Manager of the
New York Central, what would you do under such circum-
stances, with such a law?

Mr. Steene — I object to it ; it is practically asking Mr.
Fink's opinion as to the correctness of Mr. Depew's speech.

The Chaieman — I think you had better present that when
you discuss the evidence.

Mr. Depew — Q. As a railroad manager?

Mr. Steene — Is that a new question ?

Mr. Depew — Yes, sir ; this is a new question.

Mr. Steene — Then you waive the other question ?

Mr. Depew — No.

The Chaieman (to the witness) — You need not answer the
question.

Mr. Depew — I want the question on the record.

Q. If you were the Manager of the New York Central Eail-
Eoad and a law of the kind I indicated was passed, what
would you do in reference to through and local rates when a
cut, by war upon through rates, so affected your local business
that you could not do it at a profit ? A. I would go out of the
through business.

Q. Now, if you did go out of the through business under
such circumstances, what would be the effect of that upon the
local business in the State ? A. I would get all the money
out of the local business that the law allowed me to get out.

Q. Now, if you did get all the law allowed you, could the
local shipper, under such circumstances, say he was a miller
at Eochester, or a manufacturer at Utica, Eome or Syracuse,
get to New York under those local rates at any living rate ? A.

599

If he had no other outlet except to go by your roads, of course
he would, but he would not profit by the arrangement.

Q. It would dry him up then ? A. It would discriminate
against him very strongly ; I don't know to what extent ; it
depeuds upon the rates.

Q. I mean the cut rate ? A. It would injure him a great
deal — injure his business; discriminate against him very
unjustly.

Q. Under such a law you would be powerless to relieve his
necessity ? A. I would take care of the interests of the com-
pany, so far as to get remunerative rates and pay interest on
the investment ; to that extent I would.

By Mr. Blanchabd :

Q. Has Baltimore any canal, or other than a rail outlet, to
the west ? A. To the west it has none but a rail outlet.

Q. Has Philadelphia ? A. No.

Q. Has Boston ? A. No.

Q. Then, has not New York an advantage, and its merchants
a protection that those other cities have not, in their ability
to ship ? A. They have a great advantage ; the rates are
about ten or twelve cents a hundred from here to Chicago ;
no other city has that advantage.

Q. Do you know at what price a sugar merchant in New
York can ship sugar to Chicago by canal and lake, covering
insurance. A. I know the rates are as low as ten cents some-
times.

Q. What is the all rail rate or lake and rail rate from Balti-
more and Philadelphia to Chicago? A. On sugar, thirty-
seven cents from Baltimore and thirty-eight from Philadel-
phia, and the lake and rail would be twenty-four cents, I believe
less three, which would be twenty-one cents.

Q. Then, the New York shipper can ship for less than one-
half the price the Baltimore and Philadelphia shippers can,
by lake and rail? A. By lake and rail, nearly one-half — not
quite ons-half — about as forty is to twenty-four, say.

Q. An average of about one-half? A. It is not quite one-
half.

Q. Then, I understand that the New York shipper by lake
and canal has a rate less than the lowest rate that the Bal-

600

timore or Philadelpliia merchant can get the same class of
goods to the same point ? A. A lower rate.

Q. About one-half ? A. Yes, sir ; if you take the canal and
lake alone, it is more than one-half.

Q. During an average of about seven and a half months of
each year ? A. Yes, sir.

Mr. Sterne — It is not quite that amount of months.

Q. In the majority of the months of the year ? A. I rather
think it is.

Q. Have or have not the Pennsylvania and Baltimore and
Ohio Eoadp, from Baltimore and Philadelphia, demanded that
that should be taken into account in making rates from those
cities to the west ? A. They protest against that, and say they
ought to be permitted to lower their i ates from these two cities
in order to meet canal competition.

Q. Have the New York lines assented to that being done?
A. They never assented to anything of that nature ; of course
they want to get all they can.

Q. Is it not the action of the New York lines that has pre-
vented the Pennsylvania and the Baltimore & Ohio roads from
taking that advantage ?

Mr. Bteene — I object to it, as it is a matter of conversation ;
it is quite beyond the practice of any court of justice.

Q. To put it differently ; if the New York lines had with-
drawn their objections to it, would not the reductions have
been made ?

(Objection renewed.)

Q. Has not Mr. Cassett, Vice-President of the Pennsylvania
road, stated in our meetings, that if that was not the case, they
would make those reductions, but that the New York lines ob-
jected ? A. Yes, sir ; they made a demand that this reduction
should be made, and it was a matter under consideration, and
has been resisted by the New York roads so far.

Q. Now, I want to put a que.stion to you in this way : sup-
pose a shipper on the line of the New York Central Eailroad
had an annual westbound tonnage of 100,000 pounds, he ship-
ped 50,000 pounds of that freight by canal in summer, and
paid six cents per hundred pounds for it, making $'60 ; he ship-
ped 50,000 pounds in winter by rail and paid twenty cents for it,

601

which was $100 ; so that for the 100,000 pounds he paid $130 ;
now, suppose that that shipper made au annual contract with
the New York Central for 100,000 pounds at thirteen cents a
hundred, making $130, is there any discrimination against that
shipper, although the New York Central charged him in winter
twenty cents, and charged the annual contractor thirteen in
summer ?

Mr. Sterne — I think that is objectionable. There is no such
case before us, and it does not illustrate anything.

The Chairman — -The thing I have most feared in this investi-
gation is questions of this character, in their nature argumenta-
tive, but we have had a good many of them in the investigation
thus far, and I don't see any propriety in excluding this ooe,
although it seems to me they might very properly be taken
out. The witness may answer the question.

A. I understand that you are fixing an average rate for the
whole year for this shipper; I don't see that there is any unjust
discrimination against anybody else, if the same arrangement
is made with all the others.

Q. In adjusting rates from New York to interior points in the
State, the New York Central and the Erie are not common to
each other, but have intermediate territory ; we will say, of
fifteen or thirty miles ; now, so far as concerns a shipper living
between those two roads, do not the rates made over the New
York Central and its local stations, compete with those on the
Erie road, thirty miles distant ? A. Certainly ; just as much
as if the shipper lived on the line of the roads, and they crossed
each other at that point.

Q. And that is true of the Erie, the New York Central, the
Lackawanna, the Lehigh Yalley, the Northern Central, the
Buffalo, New York and Philadelphia, and all other roads ? A.
That is true of all roads.

By Mr. Sterne :

Q. Thirty miles apart ? A. Wherever a man has a choice of
two roads ; I lay that down as a general principle ; where they
they can ship either by the Erie or New York Central, whether
they are living immediately on the line of either road, or any
distance off, then the competition between the two roads takes
place.

602

Q. Do you mean to say that a shipper who is on the line of
the C-ntral being thirty miles away from the line of the Erie?
A. No ; I did not say that.

Q. That is the purport of that question ? A. No ; I did not
understand it so ; between the two roads.

Q. Oh ; equi-distant between the two roads, at any distance
would mean on the line of the Central, and thirty miles from
the Erie ? A. I understood the question to be thirty miles from
any station on the New York Central, and, at the same time
thirty miles from any station on the New York and Lake Erie ;
that is the question you put.

By Mr. Blanchard :

Q. Now, just in proportion as the rates of one increase or
decrease so the effect of that increase or decrease is felt for a
longer or shorter distance increasing or decreasing from that
rate ? A. Yes, sir.

Q. Then the question of making rates only from competing
points, is not always to be taken into account by the two com-
panies? A. Certainly not; in naming competing points, you
must name in them all points where the shipper has the choice
of two routes or more, whether they live on the line or not.

Q. Have you ever been connected with these fast freight
hnes ? A. Never ; I have had dealings with them ; I might say
yes, I have been connected with one ; the Louisville and Nash-
ville Railroad was a party to one of the fast freight lines ; the
White Line.

Q. But you have never been an officer or manager of one ?
A. Not an officer ; no, sir.

[Eecess to 1:30 p. m.J

1:30 p. M.
Alhert Fink's examination continued :

By Mr. Blanchabd :

Q. Mr. Fink, have you ever made a comparison of the rates,
through and local, from New York as compared with the rates
from London or Paris or Berlin, or corresponding distance

603

within those countries ? A. I have, in the case of some Ger-
man roads, especially on grain shipments in Germany, made
some comparisons ; the rates are uniformly higher than they
are here per mile.

Q. Uniformly higher ? A. Tes, sir ; as far as my compari-
sons extend — generally higher.

Q. Is there any parallel, to your knowledge, between the
competitions in those countries and in this countrj- ? A. No
there is not ; the competition in this country is greater, per-
haps, than in any other country that I know of.

Q. And is there any similarity in the transportation condi-
tions of this through business that would be aifected by law ?
A. I do not comprehend exactly the question.

Q. For instance, does the London and Northwestern Road
compete with a canal in the same way that the New York
Central Road competes with the canal ? A. I do not know in
regard to the canal shipments ; I suppose they do, or have, to
a cer^tain extent to compete with canals — at least with a water
courses navigation they have, I know.

.Q. Does not the fact that those countries authorize very
much higher rates than are charged in this country render leg-
islation much easier in those countries than in this ? A. I
really do not exactly understand what you want to get at.

Q. In other words, if the distance from London to Glasgow
was the same as the distance from New York to Buffalo, and
the rate from London to Glasgow was twice as much as it is
from New York to Buffalo ; is not legislation under those cir-
cumstances easier without injury to the corporation than it
would be in this country? A. I do not understand there is any
legislation on that subject in England.

Q. I ask you if it would be easier ? A. I do not exactly see
why it should be easier.

Q. Well, would it not work less injury to the corporation ?
A. I understand you now ; if they get larger remunerative
through rates, then, of course, a great many of the difficulties
that we have to contend with fall to the ground at once.

Q. I understand that you do not believe there is any com-
parison in the conditions that could fairly be made in quoting
their laws as a precedent for American laws upon the subject ?
A. I do not understand there are any laws upon the subject
there ; I understand that there is no competition there ; the

604

railroads in England at one time did compete with each other,
but never to the extent which railroad companies in this
country have ; but, of course, they only competed for a short
time, and then they agreed with each other not to compete any
more.

Q. (By Mr. Sterne). Then they combined? A. Com-
bined and acted in concert with each other in making
tariffs; and there is comparatively no competition now in
England, or very little ; the whole railroad system of England
is controlled by a few corporations,and they are operating in
concert with each other through a Clearing-house, and when-
ever they make agreements there they generally keep them, and
the difficulties are not fexperienced there that are experienced
in this country ; in France there is no competition at all ; the
government fixes the rates, and the location of the roads is so
that they really do not interfere with each other ; each railroad
has its own district to serve; you might consider that a sort of
distribution of territory, as if between the four trunk lines you
would make an arrangement with one to serve the northern
part of the country, the other the middle and the other the
southern ; that is the condition in France ; it is very easy to
regulate matters there ; in Germany it is somewhat different.

Mr. Steene objected to the witness being examined as an ex-
pert on European laws.

Mr. Shipman — We will suspend on that part for the present.

Q. Mr. Fink, as a railroad expert, what do you believe would
be the effect of the passage of an act by the State of New York
upon the different carriers where the New York Central is en-
tirely in the State, the Erie Railway passing from Jersey City
to Buffalo, and where the New Jersey Midland, the Lehigh
Yalley, the Northern Central, the Delaware, Lackawanna &
Western and the Buffalo, New York and Philadelphia roads
pass almost entirely, with the exception of a short distance,
through other States ?

Mr. Stebne — Now, that is objectionable ; this witness is
asked what his opinion is as to the future effect of an act.
I asked him as to the effect of a specific thing — to wit, the
passage of a law preventing discrimination ; now, if you will
confine your question, to the effect of a law making a hard and
fast pro rata tariff, why ask him if you like.

605

Q. What do you think then would be the effect of a hard
and fast cast iron tariff in the State of New York which would
apply only to the New York Central, as that road is the only
one of the trunk lines entirely within the State, as compared
with other companies that run in part through other States ?
A. I think such a tariff would be very injurious ; in fact it
would not be practicable to carry it out ; in order to make a
tariff it has to take into consideration all the other railroads ;
the tariff has to be made in common between all the roads
that can effect a tariff.

By Mr. Sterne :

Q. When you speak of injurious, you mean injurious to the
New York Central Eailway? A. It would be injurious to the
New York Central Railroad, and it would deprive them of
their usefulness to the country.

Q. Would it effect the people injuriously ? A. Yes.

Q. In what way would it affect the people injuriously? A.
Well, it would exclude them from a great deal of the business,
and they would have to increase their charges upon such por-
tions of the road as they could control themselves ; in that
way it would still increase the inequality of transportation
charges, which are to be distributed equally over the country;
it would make one locality pay more and others less ; it would
have the effect of aggravating all the evils that you seem to
justly complain of.

By Mr. Depew :

Q. I want to ask one question on that same point ; in
answering Mr. Sterne, yesterday, in reference to the effect of
an anti-discrimination law, such as the one he cited, did you,
in your answer, take into consideration its effect, if it was
passed only by the State ot New York, or if passed by Con-
gress to affect all the railroads of all the States ?

Mr. Sterne — I object to that.

The Chairman — I think that the witness may answer the
question (Question read by the stenographer as above, com-
mencing "I want to ask you one question on the same point ").

A. I believe I stated yesterday that such a law could not
well be passed, and be effective if passed only by one State ;

606

that it should be covered by Congressional legislation with the
concurrence of each State ; in the first place, the tariffs of the
whole country affect the tariffs of each State separately ; you
cannot made a tariff for one State ; you have to take in the
whole country ; I explained yesterday to the Committee how
the change of tariff in Chicago affected the rates down to the
Gulf of Mexico.

The Chaieman — I think you covered that question yesterday.

Mr. Depew — Did he answer the question yesterday — what
would be the effect of an anti-discrimination law ?

The witness — I said that it was impracticable, it could not
be carried out, and if carried out, \vould be injurious to the
railroad interest, and to the State and to the people.

Q. Mr. Sterne asked you some questions in regard to the
local traffic of the Erie and New York Central railroads; are
you sufficiently familiar with the local traffic of the New York
Central and Erie roads to be able to state which does the
largest local traffic ? A. No, sir ; I could not state except from
the reports if they give it ; of course, I understand that the Erie
road has a very large coal traffic that the New York Central
has not ; that coal traffic would be local traffic originating on
the road as it does, and might be heavier than the merchandise
traffic on account of the greater population on the line of the
New York Central Railroad ; I have no figures, and never in-
vestigated this matter, and, of course, cannot express an
opinion.

Q. Now, in fixing the rates upon the cereals from western
centres to the seaboard, does the question of paying a dividend
upon the stock, or earning interest on the bonds of the road
ever enter into consideration ? A. I never, in making out
railroad tariffs, have thought of the interest that was to be
paid in the matter, but simply as I said yesterday, the tariffs
Are limited by entirely other considerations than the capital
stock of the railroad company ; the principle is to get as much
money for the work you do within the limits that are set to
you by the laws, and the condition of things surrounding you
as you can, regardless of the debt or capital stock of the
company.

By Mr. Stebne :

Q. That is through traffic? A. On through traffic and all
other.

607

By Mr. Depew :

Q. Are not these rates really fixed by the rates that prevail
from the Black Sea to European cities ? A. That has a bear-
ing upon the rate as much as anything else ; the value of the
different articles in the different markets determines the limit
to vifhich transportation charges can be applied ; the cost
of the article in any market.

By Mr. Steene :

Q. How much they will bear ? A. Yes ; how much they
will bear ; the cost of any article in any market is first the
cost of production and the cost of transportation ; when any
article is of that nature and of that value in the market that
it does not admit of proper charge of transportation — I mean
by a proper charge a proportional charge, an average charge —
then the railroad companies content themselves with carry-
ing that article for almost nothing rather than not carry it at
all ; they make a tariff to suit the value of the article in the
different markets.

By Mr. Depew :

Q. In other words, Russia competes with us in all European
markets for these grains, and the rate that the Russian grain
sells for regulates ours, and our transportation rate has to be
fixed accordingly? A. That is one of the elements ; I do not
say that it fixes it altogether, but it is one of the elements
that enter into the making of railroad tariffs ; and that is not
only true of grain, but it is true of almost every article that
you can mention.

Q. Now, as a general effect, do these low rates on this class
of products from the West to the East work an injury to the
State or to the railroads ? A. The low rates from the West to
the Bast are a great promoter of commerce and the wealth of
the country, and if you were to charge a ]3roportional rate, or,
say an average rate of transportation, taking the average cost
of transportation on the Lake Shore Railroad or on the New
York Central — if you were to insist that that should be the
rate on grain from Kansas or Nebraska, why, it would exclude
that grain from the markets of the country altogether ; that
country could not be populated — could not be settled ; it is the

608

low transportation rates that have brought about the great
prosperity of this country.

Mr. Sterne — I object to all that.

The Chairman — Ask your question so that it will admit of
an answer " Yes " or " No," and then we will rule upon it.

, By Mr. Depew :

Q. I will ask that question — whether the low through rates
which prevailed during the year on this class of cereals for
instance — that is the main thing — whether the low rates upon
the cereals from the centres in the west to the seaboard work
an injury to the railroads and to the business of the State and
City of New York ?

Mr. Sterne— That I object to.

Q. Do the low rates which have been proven on the cereals
from the western centres to the seaboard work an injury to the
railroads of the State of New York, or to the business of the
State, or of the City of New York ? A. 1 think these low
rates are to the advantage of New York; they are not to the
advantage of the railroad companies all the time, but they are
certainly to the advantage of New York.

By Mr. Wadswobth :

Q. New York City ? A. Yes ; they are to the State, in so
far as they give them cheaper articles of food.

By the Chairman :

Q. You think they are to the State also ? A. Yes.

By Mr. Depew :

Q. You have testified that in the trunk line meetings the
representative of each of these roads fights for the city where
the road terminates ? A. Yes, sir.

Q. Now if an anti-discrimination law succeeded in driv-
ing New York roads out of the through business, would the
Baltimore & Ohio and the Pennsylvania railroads work for
their own cities, or come to the City of New York ?

Mr. Sterne — That is objectionable.

609

The Ohaieman — The Committee are of the opinion that in-
asmuch as there has been so much Uititude allowed on this
subject in the direct-examination, it would be a matter of in-
justice to prevent an equal latitude on the cross-examination,
but we trust that the mutual experience of both sides here will
teach them to refrain from seeking to offer this kind of evi-
dence in the future. The witness may answer this question.

The Witness — Will you please read it again ?

Question read as follows :

Q. Now, if 'an anti-discrimination law succeeds in driving
New York roads out of the through business, would the Balti-
more & Ohio and the Pennsylvania work for their own cities,
or come to the City of New York ? A. The tendency would
be that they should give their own cities the first benefit of
that state of affairs.

By Mr. Blanchabd :

Q. You testified yesterday that in some Avritiugs you believe
in uniform rates on the car load as a unit between the same
points ; I understand you to have modified your opinion some-
what ? A. No, I did not modify it ; I stated that was a subject
which other railroad managers did not agree with me upon,
and that there had been some doubt thrown upon my own
opinion, but I still hold to it myself.

Q. Supposing there are three consignees in the City of
Elmira, for one of whom the Erie Railroad unloads his prop-
erty, puts it in a warehouse, and then delivers it, being a car
load ; that for the second consignee the car is put upon a siding,
and switched backward and forward as the consignee may
desire, but he unloads the property from that car with his own
wagons; while the third consignee receives a large quantity of
the same property upon a siding which he built and owns, and
which he furnished, but which is still at Elmira ; do you believe
that it is just to charge the same rate to these three people
under the same circumstances ? A. I do not ; the diflerent
conditions under which you do the service for these people is
to be considered ; if you do not give them the same service you
have to make allowance for it.

Q. Then, if not only that difference of condition occurs at
the point of delivery, but it also occurs at the starting point,
you can imagine that these different rates on car loads between
65

610

the same points may not be unjust discrimination, and may be
proper? A. Just as many different rates may be made as
tliere are different conditions.

By Mr. Baker :

Q. Would it not be more proper to make a charge for the
transportation and a special charge for the extra service in
handling? A. Yes, sir ; that is the method that is adopted
in other countries ; in Germany a charge is made for the trans-
portation, and the terminal charges are separately charged.

By Mr. Blanchaed :

Q. Inasmuch as the fact is in this country the charges have
all gone in and fornied part of the rate, do you believe it has
been just for the railroads to make these different rates ? A.
The condition under which you perform the service is to be
taken into account in all cases.

Q. Yoii have said that you believed in dividing the cost
of the terD}inal and handling service from that of the haul;
do you believe it practicable in the harbor of New York to
divide it in that way ? A. Well, you have to arrive at an
average, I suppose ; you can say tliat you charge so much for
the terminal service and so much for the transportation.

Q. On grain arfd other freights bound east consigned to be
delivered as the consignee may direct? A. You have to know
exactly what you can do before you fix the charge.

Q. With a ship lying at anchor in the harbor, do you be-
lieve it practical to do it ? A. That would be all the more in
favor of separating the transportation charges from the delivery
charges.

Q.' Would not that increase the rate to New York just that
much, as compared with what we now do ? A. Not neces-
sarily ; of course you cannot charge as much when you deduct
terminal charges, as you did before.

Q. Do not we practically do that by charging Sj cents a
hundred for delivery around the harbor of New York ? A. You
have considered that in making your through rate ; you have
added it already on the through rate.

Q. So far as the railroad is concerned, there is now a charge
made to that effect, is there not — 83 cents by the New York

611

Central and Erie, and five cents by the Pennsylvania and Balti-
more & Ohio ? A. Yes, sir.

Q. So that for all practical purposes upon through business
the charge is now kept separate ? A. Well it is not so stated ;
in the through business I understaud that you make a rate
that includes delivery, that 3^ cents forms part of the rate.

Q. Then it is practically done on the great bulk of the east-
bound business now? A. Well, of course, you charge for your
terminal work.

Q. Now, Mr. Fink, reference was made yesterday to under-
weights ; did you ever know of a case where a railroad com-
pany had authorized an agent to take property under the
weights? A. I never did; I don't think a railroad company
ever encouraged that sort of business.

Q. Don't you know, as Commissioner of the trunk lines, that
the railroad men made a great many efforts to put a stop to it?
A. Always, j-es, sir.

Q, Do you know that the New York Central and Erie Eail-
ways weigh at New York ? A. I don't know ; no, sir ; I am
not familiar with the mode of transacting business ; I know
that they weigh all the freight that is not sent by car loads ; I
don't know whether they weigh car loads or not.

Q. Do you not think that if the railroads were to take under
weights that it would increase their accidents by carrying over
loaded cars ? A. If they overload their cars ; yes, sir.

Q. Wouldn't that stimulate the overloading of cars ? A.
Yes, sir ; it certainly would ; the objection of railroad managers
to overloading cars is a very serious one, in regMrd to loading
cars to a greater capacity than they are able to bear.

By Mr. Stekne :

Q. Under weighing results in overloading cars ? A. Over-
loading cars and then not reporting full weight ; loading 30,000
pounds in a car, and then reporting only 20,000.

By Mr. Blanchakd :

Q. Is not that method of cheating the railroads mucli oftener
practised by merchants than by railroads? A. That is practiced
by shippers principally ; that is my experience; a great many
railroads have not facilities for weighing ; there is a great many
stations where they have no track scales.

612

By Mr. Stebne :

Q. At terminal points ? A. Well, all tlie freight don't go to
terminal points.

By Mr. Blanchard :

Q. It comes from local stations on western roads, where
there is a corn crib, and they can't weigh it ? A. Yes, sir.

Q. Now, you have been present at the recent discussions
regarding the proposed divisions of eastbound freight, have
you not ? A. Yes, sir.

Q. The propositions that have been discussed do not in any
case look to the division of a gross or net money result ? A.
No, sir.

Q. They look to a division of the tonnage ; has there been
any agreement or any proposition made that the New York
lines would accept proposing a percentage of the division on
the business that should come to each trunk line ; the discus-
sions simply provide for the business which each trunk line
and each western company is to receive in gross ? A. That
was one of the plans ; yes, sir.

Q. Without undertaking to dictate the marketing points at
which the produce should be delivered ? A. That is the plan.

Q. And there is nothing in this division that changes the
making or the basis of the rates ? A. No, sir ; not at all.

Q. There is nothing that does not recognize to the fullest
extent, the influence of the St. Lawrence River, the Erie Canal,
Mississippi River as improved by the Eads Jetties and all
other considerations that have heretofore fixed tariffs? A.
They continued to remain.

Q. It is therefore simply a proposition to maintain a ton-
nage division ? A. That is all.

Q. And with the maintenance of a tonnage division to main-
tain roads? A. The tariff.

Q. And stop discriminations in favor of any western city in
favor of any shipper, in favor of any eastern city, and in favor
of any consignee ? A. That is the object.

Q. Those are the points which you have heard discussed ?
A. Yes, sir.

Q. You have heard those discussed ; have those considera-
tions formed the basis of the argument at every meeting upon

613

that subject or not ? A. Yes, sir ; the only true and proper
ones.

Q. The railroad companies have admitted the diiEculties of
this question and the errors into which competition has led cer-
tain agents

Mr. Steene — That is improper.

Q. Have you heard the railroad companies admit the errors
into which competition has led in the past ? A. They all un-
derstand them perfectly well —the errors and the abuses ; the
only difficulty has been heretofore and still is to correct them
— to take the proper means of correction ; as to the existence of
these abuses and their disapproval of them there can be no
doubt ; they know them as well as anybody else and better.

Q. Do you believe as an expert, acting for all the trunk
lines, for ten or twelve western roads, and for the Grand
Trunk Eoad, that this is the best means for putting a stop to
the errors and difficulties of the past ? A. The best and the
only means.

Q. Do you believe that this system will work injury to any
locality, any merchant, any shipper, or any consignee ? A. It
will have the contrary effect ; it will be a benefit to them.

Q. Will the result of this system benefit or injure the local
traffic of the State of New York ?

Mr. Steene — I object to his saying anything about that. I
object to his opinion as not being an expert in the matter.

A. It will improve all traffic, local or through ; whether I am
acquainted with the particular conditions of the local traffic or
not ; it certainly must, because I understand local traffic ia
general.

Q. Have you read the testimony given here by Mr. "Walker,
here yesterday ? A. Its nature ; I read an abstract of it in the
Times newspaper.

Q. You saw that he stated that a very large excess of corn
went to Baltimore and'Philadelphia ? A. Yes, sir.

Q. Do you know that the Baltimore & Ohio and Pennsyl-
vania railroads run through very large corn producing sections
which are not ac(?essible to the New York Central and Erie
roads, while they also run to every corn section that is ac-
cessible by the New York Central and Erie roads ? A. The
Baltimore &, Ohio Eailroad and the Pennsylvania road runs

614

through a very rich corn producing country — the southern por-
tion of Ohio.

Q. In the Ohio River Valley ? A. Yes, sir ; the relative
quantity of corn carried depends a great deal upon the harvest
in the different section of the country ; different sections of
the country feed different railroads.

Q. Is it your belief that the Baltimore & Ohio and Pennsyl-
vania roads, being very largely engaged up to 1866 and 1867 in
the carriage of war material and war supplies, were excluded
from participation in the through traffic to the seaboard, to
which they re-established their claims after that condition?
A. That is my information.

Q. Would it not be reasonable that those companies there-
fore should gain upon the general traffic of the country ? A.
Yes, sir.

Q. Did they not, subsequent to 1867, increase their western
connections ? A. Not only increase their western connections
but their steamship connections and facilities for doing busi-
ness in their terminal stations.

Q. Did not the Baltimore & Ohio build a line to Chicago ?
A. Yes, sir.

Q. Did it lease the Pittsburg and Connellevile road ? A It
finished it; yes, sir; in a general way the connections of both
all those roads were improved.

Q. Did it not lease the Central Ohio road ? A. They run
that before for some lime.

Q. Not before 186)? A. Yes, sir; I think so; I do not
know whether they run it, but they were coutiolling parties.

Q. Did they not lease the Sandusky, Mansfield and Newark
roads ? A. They perfected all the western connections.

Q. Did they not acquire practically control of the Ohio &
Mississippi since that time ? A. Yes, sir, practically.

Q. Did they not add steamship connection^ to various for-
eign ports ? A. They did so.

Q. Did they build steamship docks ? A. Very extensive
terminal facilities.

By Mr. Sterne :

Q. They built a great many terminal facilities that the New

615

York Central aud Erie railroads do not? A. The New- York
Conti al did it in a measure, I believe.

Q. Eeceutly ; within the last year ? A. Yes.

By Mr. Blanchard :

Q. Did not the New York Central and Erie companies fur-
nish more than those facilities prior to that time, and at greater
cost, by floating all this property in boats and barges without
charge to the consignee ?

Mr. Sterne — He don't know anything about that.

Mr. Shipman — Let him say whether he knows or not.

The Witness — That is a matter of judgment ; I rather prefer
not to answer the question ; I believe so, but that is a question.

Q. Do you know the present custom of the grain delivery in
the port of New York ? A. I understand it is delivered on
board

Mr. Sterne — That is hearsay ; you don't know anything
abouc it ?

The Witness— I see it done, but I have no direct connec-
tion with it, and I prefer not to answer the question, because
it can be answered by somebody else better than me.

Q. Do you know whether the Baltimore & Ohio deliver grain
at Baltimore into an elevator, and make a charge for that ser-
vice in addition to the rate ? A. So I understand; but I don't
know positively.

Q. And the Pennsylvania Railroad at Philadelphia? A. No
direct information on the subject, except what I know from
hearsay.

Q. Do you know whether the New York Central and Erie
make any charges for floating grain at New York or not ? A.
They do not.

By Mr. Sterne :

Q. Charges to whom ? A. To the consignee ; I understand
they deliver free of charge, including it in their rate.

By Mr. Blanchard :

Q. Now, can you give an estimate as to the probable aver-
age rate from Chicago to New York in the year 1878 per ton
per mile — transportation rate ? A. No ; it has varied from

616

thirty-five down to twenty cents, but the average I could not
tell, without knowing the quantity shipped under each rate.

Q. Do you think it would be three-fourths of a cent, a ton
a mile? A. Well, take the average between those two, it
would not be quite three-quarters.

Q. About two-thirds ? A. Yes, sir.

Q. At two-thirds of a cent a mile, what would you estimate
the cost of delivering grain and fourth class freights from the
Erie Eailway docks in Jersey City? A. The cost of delivery
from the Erie docks ; well, I don't know.

Q. If it was sixty cents a ton, how many miles would that be
equivalent to on eastbound at two-thirds of a cent a ton a mile ?
A. I stated that this morning ; well, take two-thirds of a cent
a ton a mile, that would be about thirty cents a hundred to
Chicago, wouldn't it?

Q. It would be ninety cents a ton, wouldn't it? A. Two-
thirds of a cent a ton a mile would be about thirty cents a
hundred, wouldn't it ?

Q. It would be about ninety miles, \iouldn't it? A. Yes.

Q. Then the Erie Eailway performs transportation not only
for its actual distance, but it has a supplementary service equiv-
alent to ninety miles more of transportation?

Mr. Stebne — That is objectionable ; this witness doesn't
know anything about it.

The Chairman — The witness has sworn to this just now ; he
has sworn to it assuming that the cost of lighterage was sixty
cents a ton.

Q. That is the fact, isn't it ? A. Yes ; that is th.e charge,
but then freight has been lower than thirty cents a hundred.

Q. An average of two- thirds of a cent a mile is ninety
miles ? A. At fifteen cents a hundred it would be equal to
180 miles of transportation ; the terminal charge.

Q. Then, whatever that is equivalent to in mileage is per-
formed by roads terminating in New York in addition to what
is performed by roads in other cities ?

Mr. Steene — I object to that.

Q. Doesn't the New York "Central do the same thing from
Thirty-third or Sixty-fifth streets ? A. That is my under-
standing, but I prefer you to ask this question of some one
that is more familiar with the local arrangements.

617

Q. Do you know whether the Pennsylvania and Baltimore
& Ohio railroads observed the agreed difference in rates to
Baltimore and Philadelphia as compared with New Yoi'k dur-
ing the operation of the broken rates ? A. When the rates are
broken and no tariff is maintained they generally don't observe
differeuces at all ; they generally grab all the business they
can ; each one wants to make more than the other.

By Mr. Steene :

Q. Distance is no guide ? A. No, distance is no guide.

By Mr. Blanchaed :

Q. Do you think that the making of these tonnage divisions
will make the average difference between tlie cities less than
they have been without them ? A. I can't answer "yes" or
"no;" I will answer this by saying that in maintaining the
tariff rates, and in maintaining the differences agreed upouj
that that will work in favor of the City of New York; I don't
exactly understand the question as it is put, but I believe that
is what he, is driving at, and I answer to it in that way.

Mr. Steene — That is just what I object to.

Q. Do you think the formation of these fast freight lines
would be beneficial to the public ? A. They have been greatly
so, and will continue to be so.

Q. Have they quickened the time of the transportation of
freight ? A. Oh they facilitate the movement of freight very
much.

Q. Have they continued to transfer freight at various points?
A. Certainly.

Q. Have they given merchants one set of managers and
agents through which their bills can ordinarily be collected ?
A. That has been the effect.

Q. Do you know any other particulars in which they have
benefited the merchant? A. I believe you have stated the
principal points.

By the Chaieman :

Q. What do you mean to include in your statement of fast
freight lines? A. I mean the combination of a number of
railroads to form a through line.
66

618

Q. Will you ineution the different lines? A. There is over
the New York Central what are called the Merchants De-
spatch, Ihe Blue Line, the White Line, the Red Line, and the
Canada Southern Line, and over the Erie road —

Q. That is sufficient; now, in regard to these pooling rates,
what hHS been the case with reference to maintaining rates
agreed upon ; do these several railroads observe their agree-
ment in that respect or do they cut under the rates ? A. On
the western bound traffic ?

Q. Yes. A. I think they do now ; they commenced two
years ago, and by degrees they are getting into the habit now
of observing the through rates.

Q. Do you mean to testify that they have observed them for
the past two years? A. No, they have not altogether.

Q. You think they do just at this time? A. For some time
past.

By Mr. Sterne :

Q. How long? A. Well, the improvement took place
about three or four months ngo ; some questions .that had
been discussed between the iruuk lines had finally been settled ;
before that time there was still a good deal of competition
kept up between the roads west, but they have now all come
to the conviction that this arrangement was of advantage to
everybody, and they are willing to adhere to it ; at first they
thought it was one of those arrangements that would be
broken up in a short time, and they kept their machinery for
fighting in fighting order ; I am speaking of westbound freight

By Mr. Blanchard :

Q. Do you say the trunk lines did that or the western roads ?
A. The western roads ; the trunk lines have always strictly
adhered to their agreement ; of course, there was no agree-
ment at the start with the western roads, and they did as they
pleased.

By Mr. Sterne :

Q. On westbound freight from New York thosc! freight hnes
determine the rate to the west, don't they? A. In a great
many instances; the roads forming a link in one of those

619

freight lines would make these concessions in order to bring
the business over its own road, but now the business is all
divided.

By Mr. Blanchaed :

Q. Have you not testified repeatedly that the fast freight
lines do not make the rates ? A. They have no authority to
make rates.

Q. Have these fast freight lines made any westbound rates ?
A. They have not.

Q. They get them from the railroad company V A They
must be authorized by the railroad companies ; they need not
be authorized by a trunk line ; they are authorized often by
one of the western loads, and the trunk line need not know
an^'thing about it ; one of the western roads may authorize one
of those fast freight agents to make in its behalf a reduction ;
that is the thing we have now broken up.

By Mr. Steene :

Q. Do the fast freight lines make the rate with the consent
of the company? A. No, not with the consent of trunk
line ; the fast freight line quotes the rate that is furnished to
it by the trunk line.

Q. With the consent of the trunk line it makes the rate ?
A. The trunk line makes the rate and furnishes it to the agents
of the fast freight line, and says this is the tariff rate, and it is
understood that this is to be maintained by you.

Q. A.S against everybody ? A. Yes, sir.

Q. Then the trunk lines have come to the conclusion that
special rates as to individuals, as to classes depending upon
the amount o shipm.^nt, or depending upon competition, are an
injustice and an injury, and ought to be abolished ? A. They are
fighting ngainst them all the time.

Q. Answer my question " yes " or " no." A. Yes, they
came to that conclusion ; every sensible railroad manager has
come to that conclusion long ago.

Q. Thev have now issued orders, as I understand you, that
these abominations of special rates to individuals arising from
volume of shipment, peculiarities of shipment, and circum-
^st^nces of shipment, shall be abolished ? A. Well, you go a
little too far.

620

Q. They still make special rates ? A. I have stated to you
that under different conditions — under the same conditions
where shipments are still made they do charge the same rates.

Q. Then, do I understand you to say, that to-day a special
rate can be made by a fast freight line, depending upon differ-
ent conditions of shippers at Cleveland, at St. Louis, at
Chicago, and at Cincinnati ? A. No ; the tariff already pro-
vides for different conditions in a measure.

Q. Is there a rate in your tariff on western bouud traffic
which provides for a train load as against a car load ? A.
No ; but it provides for a car load as against a shipment less
than a car load.

Q. Then, with the carload as a unit, every shipper is' placed
upon absolute terms of equality, no matter what the conditions
of the shipment are, what the conditions of the sidings are, or
what the condition of the man's business may be, or any ques-
tion of teriminus? A. The tariff assumes these conditions are
all alike, and the tariffs are made alike.

Q. Upon the difference of those conditions, whatever they
may be, the fast freight line agent is not permitted to make
any difference ia the rates ? A. I say the conditions are as-
sumed to be alike.

Q. If they are not alike, is the fast freight line agent now
permitted to make differences of rates ? A. No ; he has to
report the case if there is any reason there should be a change
made.

Q. To whom does he report it ? A. It would have to be
reported to me ; no rate can be changed by any one of the
trunk lines except with the consent of all the others.

Q. What are your rules upon that subject where you vary
the conditions of these fast freight agents and when don't you
vary them ; have you any specific rules on that point? A. The
tariff presumes all cases are alike.

Q. You maintain your tariff and you li&ten to no expostula-
tion upon the part of the fast freight agent ? A. We have
nothing to do with the fast freight agent.

Q. Then I understand you to say that these differences of
condition to which Mr. Blanchard refers, of amanatElmirawho
has a siding, and the man at Elmira who handles his own
freight, as against the man whose freight is handled, are dif-
ferences which upon your through traffic you have utterly abol-

621

ish ? A. No ; they are not utterly abolished ; cases like
this come up sometimes; iu Chicago, a merchant is nearer to
the road ;• soaie roads claim that they should equalize the
disadvantages of their stations ; that is a question that often
comes up ; one station is many miles from the merchant, an-
other is nearer ; he has to pay five cents for hauling, the other
h;is only to pay three cents for hauling ; and the idea and the
plan is that they should pay the same delivered at their store-
houses, wherever they may be ; those questions have come up
and been discussed, but theie has been no action taken upon
the subject.

Q. Do you, in those cases that you have named, make dif-
ferences of rates ? A. I would permit them.

Q. Well, do you ? A. I would if the case comes up in that
form.

Q. Has any suah case presented itself? A. I do not know
that I have acted upon any such case, but they haye pre-
sented themselves.

Q. Have you ever assented to any difference in the rates
based upon any such conditions ? A. I have not.

Q. Let me draw your attention to question 32 and your
answer to it in Mr. Nimme's question to you and your answer
to him ? A. I remember all about that.

Q. Are your views still the same upon that subject ? A. I
said so before ; yes, sir.

Mr. Steene — Now, I desire to have this marked in evidence ;
to a question of a similar character, you would answer me
substantially the same thing now ? A. Yes, sir.

(Page 40 of book, entitled " Internal Commerce of the United
States, 1677," from question 32 to question 33, received in
evidence, and marked " Exhibit No. 3, June 21st, 1879.")

The Witness —In connection with that, will you put in this
clause ? (Witness refers to the answer to question 37 on pages
43 and 44 to the end of the word "justifiable" on the fifth line,
which was received in evidence, and marked " Exhibit No. 4,
June 21, 18 9.)

Q. Now, what occasion is there for lighterage of westbound
traffic from the City of New York, which is furnished by the
jobbing nterests of the City of New York and the jobbing

622

houses in the City of New York to the New York Central
Railway; what occasion is there for lighterage in the port of
the City of New York of the part of the westbound traffic
which is furnished to the New York Central Eailroad by the
jobbing interests in New York? A. Well, I do not know
what the occasion is ; that is the practice of the railroad com-
panies.

Q. No ; what occasion is there ; a dry goods merchant in
the City of New York sells to a western merchant a bill of ten
thousand dollars' worth of goods, and he ships it by the New
York Central Railway; what possible occasion is there for
lightering those goods on westbound traffic? A. Well, they
are not lightered.

Q. Therefore, all the goods that go out of New York from
the commerce of New York proper, and which do not come
from Europe or from other points in the United States, and
delivered to the waterfront, are not lightered ? A. There are
some goods lightered.

Q. You have answered these questions on the cross-examina-
tion of Mr. Blanchard ? A. I referred Mr. Blanchard to the
local agents of these roads — that he could get information
from them much better than from me.

Q. You, nevertheless, ventured to answer that so far as the
westbound traffic is concerned that the lighterage charges
were to be added to the New York rates, and that that repre-
sented, 1 believe you said, 140 or 150 miles of trackage? A.
Thei'e aie certain aiticles, mosiy fourth class articles, that are
lightered, I believs, from the warehouse to the depot of the
New York Centra! road <ind the Erie, such as merchandize.

Mr. Depew — Y.'o rec ive part of our business at Piers 'd and
4, East River.

Q. That is for your own convenience ; if, for instance, the
New York Central Railway had accommodations enough iu the
City of New York for its freight reception, would there be any
occasion as to goods that go from New Yoik over the New York
Central, for any lighterage at all ? A. Well, if the goods
could all be hauled to the depot there would be no use for
lighterage.

Q. Therefore, if they charged for lighterage, they would
impose upon the commerce of New York an additional tax for
their own accommodation, to having the depot where they

623

could get land cheap ? A. They do Hot charge lighterage — it
is included in their general charge.

Q. If they were to charge lighterage on such goods they
would be chargicg for an imposition which they themselves
cieated, by having the depot on the water front where they
couH get land cheap? A. I would not call it inaposition ;
J^ew York is a very large city — larger than other cities^ — and
they have to haul five or six miles from one depot to another ;
in other cities the hauling from the warehouse to the depot is
generally done — not always — in St. Louis it is otherwise — it is
generally done at the expense of the shipper.

Q. Is it not done in the City of New York, at the expense of
the shipper, to some degree ; don't the shipper deliver at the
foot of Broad street, at his own expense, freight that is to be
delivered to the New York Central Kailroad, and don't he at
his own expense deliver goods that are delivered at St. John's
Park by drays? A. That is so ; that is a great convenience
to the shippers to deliver at Pier 4.

Q. Don't the shipper, at his own expense, bring the goods to
the foot of Broad street, and brin^ the goods to St. John's
Park ; now, either that is so or it is not so, or you don't know?
A. That is so.

Q. If that be so ; is not, in that respect, the shipper placed
precisely upon terms of equaHty in New York with the shipper
in Baltimore, who delivers at his own expense, at the Baltimore
& Ohio depot, the goods which he proposes to send over the
Baltimore & Ohio Eailroad ? A. That depends altogether
upon the distances — upon the cost which the shipper has to
pay to haul to those various depots.

Q. You mean the drayage ? A. The drayage.

Q. That is not of any consequence ? A. That is of great
consequence ; in one city it is two cents, in another five cents,
and the other may be fifty cents ; to haul it from Wall street
to the Sixty-fifth street depot would be a great expense.

Q. That would be an expense that is imposed by the New
York Central Kailroad because it chooses to have a depot at
Sixty-fifth street instead of in the heart of the city ? A. It
is an expense ; those people living in the lower part of the
city would have to haul in some way or other the freight to the
other depots themselves.

624

Q. Well, don't they have to haul to St. John's Park ? A.
They do.

Q. If the New York Central Eailroad Lad three depots in
the heart of the city, could not they haul just as well to those
three depots in the heart of the city as to St. John's Park ? A.
It would be a great deal longer to haul from the loM'er end
of the city, to St. John's Park than it would be to the ferries
below Fourteenth street, depending upon the location of the
warehouses.

Q. Take, for instance, a shipper in Leonard street ; it is
very much nearer for him to haul to ?st. John's Park than
down to Broad street ? A. Certainly ; he hauls to the nearest
depot.

Q. Therefore, if the New York Central Railway, as part
of the terminal facilities at the City of New York, had put up
three or four large reception depots for freight in the heart of
the city, there would be no difficulty about receiving freight at
the same expense as in Baltimoie? A. If they had the depots
as convenient as they are in Baltimore, of course there would
be no difference. ^

Q. All your answers to Mr. Blanchard's questions as to the
amount of traffic and the figures you have read here at the
outset of your cross examination relate to western bound
traffic alone, don't they ? A. Yes, sir.

Q. And you stated that that was confined to the trunk
lines? A. Confined to the trunk line.

Q. Mr. Blanchard asked you whether or not the City of
Baltiaiore had other than the Baltimore & Ohio Railway any
west bound traffic? A. Rail traffic he asked me.

Q. Is there any westbound rail traffic? A. The City of
Baltimore has other routes to the west; but not all rail routes ;
they have the Pittsburgh & Ohio Railroad, for example, the
same as New York, but not all rail routes ; they start by rail
from Baltimore.

Q. Have not they water routes just as accessible as the
water routes of New York ? A. They have to southern ports.

Q. And therefore your answers in giving the various lines
from New York to southern ports showing the additional facili-
ties of New York as compared with Baltimore and Philadelphia
are equally true of Baltimore and Philadelphia ? A. Yes, they
have the same communication to other southern cities.

625

Q. To Savannah and Charleston and Norfolk ? A. Yes, sir.
Q. Now, you were led to say that the differences in the
lates before the pooling arrangement were greater than they
were after the pooling arrangement between Baltimore,
Philadelphia and New York ? A. They were greater before
this contract was made on the 5th of April, 1877.

Q. But you have also testified before this Committee that
these tariffs were not maintained that existed before that ? A.
They were sometimes maintained, but generally they were not
maintained.

Q. And they were maintained, when maintained, but for a
very short time, and in the general demoralization of the rates
nobody conld tell what rates were for any of these cities? A.
No, sir.

Q. And the mileage question did not enter into the question
at all, practically, in making rates when there was a war of
rates ? A. No, sir.

A. Therefore, your answers as to the difference in the rates
that existed between Baltimore, Philadelphia and New York,
as compared with the difference of rates that existed since the
pooling arrangement, have reference to tariff rates only, that
existed before that time ? A. They apply to the tariff rates.

Q. Were not those tariff rates fixed by the various trunk
lines by agreement also ? A. Yes, sir.

Q. Therefore, when the New York Central and the Erie and
the Baltimore & Ohio and Pennsylvania Railroads fixed the
rates, they fixed them at higher points than in years past ?
A. Yes, sir ; at larger differences.

Q. But these differences were not accidental differences, but
differences that were fixed upon by the various railway trunk
lines, were they not ? A. Agreed differences in the tariff.

Q. And they were agreed between the trunk lines, during a
period of years how long anterior to the pooling contracts ?
A. Anterior to my connection with the business.
Q How long anterior ? A. That I cannot tell.
Q. Were they ten years before ? A. I suppose they were
always in existence, more or less.

Q. Therefore, when you spoke of the differences of the rates,
you spoke of the agreed differences between the trunk line
managers, did you not ? A. I spoke of the agreed differences,
and they were observed whenever tariffs were observed.
67

626

Q. They admitted, in conversation with you, at the various
conferences that were had, you being its executive officer, that
they were very rarely adliered to ? A. That is my general
knowledge, that they were not often carried out ; it don't follow
that the differences might not have been carried out.

Q. And you had no means of knowing what the differences
were when a tariff was not adhered to — no human being can
know ? A. No human being can.

Q. Taking the diflerences that exist now they are " hard
and fast," are not they, and they are adhered? A. On the
westbound business.

Q. Formerly they were not? A. I could not tell whether
the differences were adhered to or not?

Q. You can't tell anything about it ? A. I can tell you that
the rates were not adhered to ; they might have adhered to the
differences, for all that ;' for all I know.

Q. But you have no knowledge on the subject? A. No.

Q. Would there be any more reason for adhering to differ-
ences than adhering to rates? A. Yes, sir; I suppose if
the New York Central Railroad would establish a lower rate
than the agreed rate tlie Pennsylvania road would very likely
make a corresponding difference in their rates ; in that way
they might continue to maintain the differences in the rates
without maintaining any rates.

Q. Would there be any likelihood, in the general scramble
for business, of adhering to differences any more than to rates ;
would for instance the fast freights? A. I think they would
always adhere to the differences wherever they could, because
if the differences were satisfactory to them they would adhere
to them.

Q. The rates ? A. The rates might not be.

Q., For instance, to-day four trunk line managers come to-
gether and agree upon rates ; to-morrow they cheat each
other; to-morrow they fail to adhere to their contract that
they made to-day ; now is there any more reason why they
should adhere to the difference than why they should adhere
to the rate ? A. Yes, there is some reason ; because in these
fights they generally wish to keep their cities in their relative
proportion to each other, and I believe when the New York
Central Railroad makes a reduced rate from Chicago to New

627

York, tliat the Pennsylvania Railroad would fix the same dif-
ference and make a reduced rate on the same difference.

Q. Would undercut still further ? A. Make the same differ-
ence on the cut rates as the others ; I do not say that was the
case, but I say that would be the natural tendency of regulat-
ing the rates.

Q. There would be no regulation about it ; you say the
western road fixes the rate, the cut rate and the Pennsyl-
vania road don't fix it? A. The Pennsylvania road fixes its
rates.

Q. On eastbound traffic ? A. They have their agents in the
west that operate with the western agents.

Q. On eastbound traffic, if the agent of the New York
Central wanted the busine^^s, would there be any more reason
for his adhering to the difference than adhering to the rate ?
A. I have stated that there would be; there would be a desire
to maintain some differences ; for instance, I think, when
the Baltimore & Ohio Kailroad finds that the rate has been
cut they make a much lower rate to Baltimore than the cut
rate is ; I do not say that that is actually done and always can
be done, but that is the general tendency of it.

Q. You don't know, when' the rate is once cut, as to what
the rate is — rnobody knows? A. Nobody does? yes, some-
body does ; each for himself, but not for the other

Q Now, you have stated that low rates on eastbound traffic
benefited the State of New York; do you mean to have this
Committee understand that a low rate on corn or a low rate on
cattle from Kansas City to New York — considerably lower than
from Syracuse to New York — benefits the cattle grower in the
neighborhood of Syracuse and benefits the corn grower in the
neighborhood ol' the City of Utica? A. I did not say that;
you cut me ofl when I wanted to make an explanation ; I an-
ticipated you would make that objection to my answer, but you
did not allow me to finish my answer; I cannot say "yes" or
"no" to many questions, and that is why I object to being con-
fined to that.

The Chairman (to the witness.) — I think you said it was a
benefit to the consumer in the State.

The Witness — Yes ; but at the same time, as long as the
State of New York don't produce all its cereals, why, it is a
be;nefit to the State of New York to get in the cereals at a

628

lower rate ; at the same time, it would be injurious on the
other side, if the railroad companies did not adapt their local
rates to the through rates and discriminated injuriously
against a farmer of New York; that was to be my answer,
but I was not permitted to give it.

Q. If the low rates are a benefit and low rates are attain-
able only by competition ; do pray, tell us upon what principle
you claim that your pooling arrangements which maintain
rates at a higher rate than the cut rates,- are a benefit to New
York y A. Upon the principle that there is a great deal of
difference between hw rates and louver rates ; there are low
rates that benefit the people,' and there are lower rates that
are unnecessary, and they are an injury to all.

Q. Is not the injury of the low rate attributable entirely to
two causes, the uncertainity of the rate and the secrecy of tlie
rate ? A. The difficulties of the low rates, there is no

Q. Can you answer me "yes" or "no"? A. I cannot
answer you " yes " or " no," and I will not.

Q. Is not the difficulty in relation to the low cut rate
primarily its uncertainty ? A. It need not be ; a rate can be
low and can be certain.

Q. You do not pay attention to- my question ? A. I do not
understand you then ; perhaps, I am too tired to comprehend.

Q. The low cut rate is injurious to a community mainly be-
cause it is uncertain ? A. No ; because it is not alike ; it is not
the same to all parties.

Q. And it is demoralizing to the whole community? A.
Yes; you introduce an unjust discrimination.

Q. And that, therefore, it is better for the community to
pay a higher rate which is certain and the same to all, than
the low rate which is secret, and not the same to all ? A. All
these questions, Mr. Sterne, are relative matters ; I cannot,
by merely saying aye or no, answer these questions ; they re-
quire explanations.

Q. The difference between the low cut rates which prevailed
on westbound traffic before the organization of your pool, and
your higher pool rates now as they are fixed — you think that
difierence is compensated for by the certainty of the rates
and its being alike to everybody ? A. Now, you give a specific
case, and I can answer specifically, that it is ; but when you

629

mention a general question I want you to specify a particular
case.

Q. Then the community had better pay to the railways high
remunerative rates on the condition that they are the same to
everybody, and open instead of secret, than to pay low rates
with the demoralizing conditions that arise from special dis-
criminations, and from uncertainty ? A. Most certainly, but
subject to this qualification : that the higher rates are reasonable
and proper.

Q. Mr. Blanchard put a series of questions to you as to the
extension of the Baltimore & Ohio Road, and the Pennsylvania
Road westward since 1867 ; did not the Erie Road and the N. Y.
C. Road, since 1867, make precisely the same extensions and the
same ramifications through the west as these other two roads
did? A. They did not make the same.

Q. Not the same, but precisely similar ? A. Similar ; I do
not think the New York Central was ever extended beyond its
terminus.

Q. I mean either by leasing or by close connections ? A.
Well, I think the Pennsylvania Railroad went rather ahead of
the New York Central in that respect, and the Baltimore &
Ohio.

Q. I am speaking now of Chicago points, Cincinnati points,
and St. Louis points ; have not those three points been covered
equally by the New York Central, and the Erie with the Balti-
more & Ohio, and the Pennsylvania, since 1867 ? A. I think
not ; no sir ; the New York Central — not as the New York Cen-
tral Railroad, but as Mr. Vanderbilt —has made acquisitions,
and these roads are not part and parcel of the New York Cen-
tral Railroad.

Q. Practically has not the New York Central had its close
western connections since 1867, equally with the Pennsylvania
and the Baltimore & Ohio ? A. I do not think they were as
completely under control as the roads of the Pennsylvania
Railroad are ; they have had their connections with the Lake
Shore for years ; but it is not until lately that the road was
controlled by the President of the New York Central Railroad;
but it is different with the Pennsylvania Road ; they absolutely
control a vast system of railroads in the west that the New
York Central do not compare with.

Q. The Pennsylvania Railroad .did afford to the citizens of

630

Philfidelphia considerable terminal facilities in bringitog the
ships and the railroads closely together ? A. That is generally
known to be tlie fact.

Q. That it is only within the past year that the New York
Central has doue the same thing in the City of New York ; and
the Baltimore it Ohio likewise has created a large number oi
terminal facilities in tlie City of Baltimore within the past ten
years, bringing the ship and the railway together very closely?
A. They have made terminal facilities.

Q. And those facilities long antedate the facilities which
have been afforded by the New York Central in the City of
New York? A. As regards the construction of elevators, I
believe it does.

Q. And also as regards the construction of tracks to the
river front? A. I am not familiar with the history of the local
arrangements of the New York Central Railroad here.

Q. When you speak of fast freight lines being a benefit, do
you speak of the coopeiative fast freight lines, or the non-
cooperative lines? A. Of all fast freight lines that are organ-
ized for the purpose of transacting through business ; I stated
yesterday that it did not make any difference to the public
what arrangements it inif2;ht have with the railroad companies;
that their service was alike, and therefore alike a benefit to
the public, no matter what their particular relations to the
railroad companies would be.

i.- Q. You were giving the westbound canal traflSc — is not that
mainly coal traffic? A. That is reported in the books as the
traffic from tide water, west bound.

Q. Is it not mainly coal? A. A good deal, I suppose, is
coal.

^ Q. Is not it two-thirds or three-fourths coal ? A. That will
appear from the reports of the canal.

Q. You do not know anything about it? A. I do not ; no,
sir.

Q. Was or was not the ground of the difference made be-
tween the freight charges two cents a hundred and four cents
a hundred on Philadelphia and Baltimore freight ; charges on
fourth class freight, based upon the differences of ocean rates
between Baltimore, Philadelphia and New York ? A. I dp not
think the ocean rates had anything to do with fixing the local
rates from the various seaboard cities to the west ; the differ-

631

ences between the local rates are determined on their own
merits, and then the question of export business becomes a
secondary consideration.

Q. I iim speaking of the fixing of freight rates on westbound
tratfic, of which yon are Chairman of the Executive Committee ;
you Ijave now testified that in all the Committee meetings of
which you have been the Chairman, the question of ocean
freights did not come into consideration? A. I don't say so ;
I sfiy that in fixing the differences in the local rates from sea-
board cities to the west, as between the different seaboard
cities, that the question of ocean rates has no bearing ; that
they are fixed altogether with reference to land transportation,
and the question of ocean rates is a secondary question which
is to be fixed afterwards.

Q. Mr. Vanderbilt, in a letter addressed to the Chamber of
Commerce, of April 18th, 1878, says that these differences were
fixed upon the basis of the difference of the ocean rates ? A.
That is not ray understanding ; I did not fix them, and I have
never heard the subject discussed in connection with the ocean
rates, but as I said before, this contract which fixes these dif-
ferences was antedated to my connection.

Q. But since that time modifications have been made in the
contract? A. Not in that particular; no, sir.

Q. Yes ; because the Erie gets less percentage. A. That
has nothing to do in the world with that which you are
speaking of.

Q. I mean the contract as to the differences ; the reasons
which prevailed for making them have been discussed ? A.
The reasons have been in a general way discussed; in my
view of the case, it has nothing to do with it ; perhaps I ought
not to state that it had nothing to do with it, because I had
nothing to do with making the rate, but I don't see any con-
nection between the two ; that is an independent question ; the
fixing of a land rate was fixed with regard to the business from
the seaboard cities.

Q. Then your impression is that Mr. Yanderbilt is mis-
taken when he says that it arises from the difference of the
ocean rates, in his letter to the Chamber of Commerce ? A. I
don't know whether he meant to say that ; I hardly think
that that question had anything or ought to have had anything
to do with it ; but I can't say whether it had in his mind or

632

not ; I can't speak for him ; it might have had in his minrl
something to do with it.

Q. There is really no difference in the ocean rates, is there ?
A. I have stated before that the ocean rates from Baltimore
are claimed generally to be higher, and this is made an argu-
ment by the Baltimore & Ohio Eailroad for tliose differences.

Q. Yon have no knowledge upon the subject ? A. I have
noticed the rates, but nothing specific now that I can produce.

Q. Is not the bulk of the traffic- done by sailing vessels
which come out in ballast? A. I couldn't answer that ques
tion — the relative proportion carried by sailing vessels and
steamships.

Q. Which come out in ballast — isn't that so ? A. I don't
know.

Q. And you don't know whether the rates are the same from
Liverpool for the round trip, or from Queeustowa for the
round trip, from either of these seaports ? A. I don't remem-
ber any particular ocean rates now, except the general facts
I have just stated.

Q. You stated there was no discrimination in the case of an
all rail contract for the year around, where the railroad comes
in competition with the canal ; isn't there a discrimination
against the canal in such case ? A. In all competition there
is

Q. You answered a question of Mr. Blanchard's that there
was no discrimination made when a railway company agrees
with a shipper on the line of a canal that he will use their road
all the year round, winter and summer ; is there or is there
not a discrimination, under those circumstances, against the
canal ? A. I say there is no discrimination ; it is not called a
■ diseriminatiun when I take the business away from a com-
])eting line ; I never heard that name — that it was a discrim-
ination; I consider the parties that transport on the canal
common carriers competing with the railroad, and if I make
a rate taking business away from them I don't consider that a
discrimination ; the principle of competition is carried out.

Q. It takes away from the tolls of the canal, doesn't it? A.
Of course it takes away from the tolls of the canal.

Q. It takes away from the income of the boatmen ? A.
Most certainly.

Q. Do you know anything about the expense at Baltimore

633

for transferring from the regular terminus to Locust Point ?
A. No ; I don't.

Q. Locust Point is the shipping point of the Baltimore &
Ohio Railroad ? A. Yes.

Q. And the Baltimore & Ohio Baih-oad is compelled, isn't
it, to take from the centre of the City of Baltimore its freight
traffic to Locust Point ? A. No, not that I know of ; as I said
before, I don't wish to be examined upon these local questions,
because I pay no attention to it ; they have several depots in the
city, I believe, where they receive freight ; Locust Point is
their foreign shipping point. *

Q. Don't the Pennsylvania Railway, at its own expense, also
take from its regular terminus, West Philadelphia, through
the city of Philadelphia to the "iValnut street wharf and Chest-
nut street wharf? A. They have to haul their business for
their road as a matter of course.

Q. Now, with refence to Boston, do the Boston railways
afford facilities for the steamship to come close to the railway
terminus? A. I believe they do ; in two instances; I have
heard them say that they do.

Q. That is an advantage to the city of Boston, you think,
which is afforded by the railway ? A. I don't know that it is
an advantage to the city of Boston ; of course it furnishes
facilities for the transaction of the through business ; if that
is an advantage to the city of Boston, then it is an advantage.

Q. Can jou tell me whether or not you think it is an ad-
vantage or a disadvantage to the city of New York to have
the rates the same from Boston to the west, as from New
York to the west ? A. The lower you can make rates from
any city, in comparison with others, the more advantage it is
to that city.

Q. It attracts business to that city ? A. Yes ; the rate from
Boston don't apply alone to Boston, it applies to all the New
England places that are as near to the west as Boston is, and
nearer.

Q. Portland for instance ? A. Portland— yes ; or Fitch-
burg, or Worcester.

Q. Is Portland as near' to the west as Boston ? A. I sup-
pose not quite.

Q. Yet the rates from Portland to the west are the same as
from Boston ? A. Yes ; and the same as from Springfield, which
68

634

is nearer to the west ; I believe they are the same as from
New York.

Q. The Boston rate being the same as from New York, why, of
course, the Portland rates and the New York rates are pre-
cisely the same ? A. Yes, but the intex-ior points are also the
same, which are nearer ; it is an average rate.

By the Chairman :

Q. Are there any explanations in regard to anything that
you have been examined upon you desire to make ? A. I
think I have made all the explanations as I went along.

Q. When your testimony is printed, if there is any part that
you desire to explain, we will give yoa an opportunity to come
before the Committee and explain it at that time ? A. I will
be very glad, indeed, to do so.

By Mr. Steene :

Q. You have stated that these various railways fight for
their respective cities at these conferences ? A. Yes, sir.

Q. Are merchants, or any of the civic authorities of those
cities present when this contest takes place ? A. No ; I think
the railroad takes good care of them, though

Q. I don't ask you what you think ; answer my question ?
A. I say, "no."

Q. That would have answered it, wouldn't it, without mak-
ing an argument out of it ? A. Yes ; I think it would be well
to put that in ; why do you object to it ?

Q. I object to any more than an answer to my question.
A. The fuller the answer, the more satisfactory to you.

Q. Do you think that the railway takes care of anything but
itself? A. It takes care of itself, and in doing so also takes
care of the people.

Q. Docs it take care of anything but itself ? A. It takes
care of their interest — of all the interests that are intimately
connected with it.

Q. That is an inference ; when they fight, do they fight for
anything but their own traffic ? A. They cannot fight except
they fight for the others.

Q. When they fight, do they fight for anything but their
particular traffic? A. They do; they understand perfectly

635

well that the interest of the cily is their interest, and they
fight for both at the same time ; they can't help fighting for
both ; they can't fight for one alone ; they take it into consid-
eration.

Q. That is precisely for the same reason that you think if a
man fights he fights for his friends as well as himself ; but,
for instance, when Mr. Butter, representing the New York
Central Railway, fights for the New York Central Railway in
those traffic arrangements, he fights for his road, doesn't he ?
A. Yes, and he fights for the city.

Q. Doesn't he fight for Boston as well as New York ? A.
He rather fights for New York.

Q. Doesn't he fight for Boston as well as New York? A.
He fights for New York as against Philadelphia and Balti-
m ore.

Q. And he fights for Boston as against them both, doesn't
he ? A. No, I don't think he does ; his largest interest he
fights for, New York.

Q. If sixty per cent of the freight traffic comes over the New
York Central from Boston he fights for Boston then ? A. If
his larger interest controlled he would most likely fight for
Boston rather than New York.

Q. A railway manager fights for where his largest business
comes from as well as for his road ? A. Where his largest
interest lies ; I have put questions to Mr. Butter that did not
affect the quantity of business consigned to the New York
Central Eailroad, but he took good care to see that the city
of Philadelphia did not get the advantage in such transac-
tions, always guarding the interests of the city of New York
as against the other cities.

Q. Suppose that the pool should allow him a larger per-
centage on Philadelphia business ; he would fight then for the
Philadelphia business rather than New York ? A. I think he
would become a Philadelphia resident and identify his business
with Philadelphia.

A. Then there isn't any sentimentality about it? A. No
sentimentality about it whatever in any business transactions
that I have been acquainted with ; it is a matter of dollars
and cents altogether.

Q. In the classification decisions are the merchants ever al-
lowed a vote ? A. Merchants are never allowed a vote — no.

636

sir — but any suggestions they make are noticed and consid-
ered and acted upon, if they are approved.

J. H. Butter, recalled :

The witness produces the following documents :

A copy of an agreement between the New^ York Central &
Hudson River Eailroad Company and Hamilton McK.
Twombley, the original of which has bp.ea heretofore marked.
(Received in evidence and marked "Exhibit 5, June 21st,
1879.")

A copy of an agreement of the Standard Oil Company,
August ist, 1875, with the New York Central & Hudson
River Railroad and Lake Shore & Michigan Southern.

By the Chaikman :

Q. That is a paper we have had, isn't it ? A. Yes.

(Two contracts between the parties above referred to re-
ceived in evidence, and marked Exhibits Nos. 6 and 7, June 21,

1879.)

By Mr. Sterne — There are no written provisions ; there has
been in some cases a variation from that supplemental con-
tract ; that supplemental contract provides for performing cer-
certain terminal services for us, and instead of that they are
fixed in a rate without reference to that contract.

Q. Is that the existing agreement ? A. Yes, sir.

Q. Are there modifications of that? A. No substantial
modifications.

Copy of an agreement between the Hudson River Railroad
Company and Webster Wagner sleeping cars, dated September
1st, 1865, expiring September 1st, 1870.

A copy of an agreement of the New York Central Railroad
Company with Webster Wagner, as to drawing room cars, dated
January 1st, 1869, expiring January 1st, 1879.

Copy of an agreement of the New York Central Eailroad
Company with Webster Wagner for sleeping cars, dated Janu-
ary 1st, 1869, expiring January 1st, 1879.

637

Copy of an agreement of the Hudson Eiver Eailroad Com-
pany -witli Webster Wagner for drawing room cars, dated
January 1st, 1869, expiring January 1st, 1879.

Copy of a contract of the New York Central & Hudson Eiver
Eailroad Company with the New York Central Sleeping Car
Company, taking effect November 1st, 1875, expiring November
1st, 1885.

Printed copy of a contract between the New York & Harlem
Eailroad Company and the New York Central & Hudson
Eiver Eailroad Company, dated April 1st, 1873, expiring April
1st, 1874.

(The above papers received in evidence, and marked Exhibits
8 to 13, June *2l, 1879, inclusive.)

The Chairman — (Eeading from the memorandum furnished
the witness.) The question that was put to him, June
20th, was, " How cauch have you paid the Merchants
" Despatch Transportation Company for the year 1578,
" as earnings of one of their cars per mouth ? A. We
" paid them for car mileage, during the year 1878,
"1233,290.41. Q. How many cars have they on your road ;
" how much have you paid them for the use of the cars ; and
'' how much percentages and commission ? A. The total num-
" ber of cars in service during 1878 was 3,196, and the amount
" paid for use of cars was 1233,290.41 ; and there was paid for
"commission $155,814.14. Q. Give what said Merchants
" Despatch Transportation Company have received from the
" New York Central & Hudson Eiver Eailroad Company for
" the past two years ? A. The commissions paid for two
" years ending April 30th, 1879, were $336,569.79 ; amount of car
" earnings during the same were $455,110.26. Q. How much
" did the elevator referred to in your testimony cost, that is
" leased by the New York Central k Hudson Eiver Eailroad ;
"how much is the rent? A. The elevator cost $504,601.92 ;
" the rent is a percentage of the receipts of the elevator for
" elevating, and varies according to the business done."

By Mr. Baker :

Q. How much is that percentage ? The contract shows that;
I think it is 60 per cent, but I have really forgotten.

638

Mr. Steene— Is the land included in that? A. No, those
questions are just as you gave them to me.

The Chaieman— The answer covers the question.

Mr. Steene — As to the cost of the building only, but not as
to the cost of the land.

The Witness — If I may make a suggestion — if there is any -
thing in that that is incomplete, amend the question and strike
it out of the evidence as far as it has gone.

By Mr. Steene:

Q. Tou run your oil ears back to Oil City, to the oil regions
empty, don't you ? A. Yes.

Q. Therefore the cost of the haul includes the cost of return-
ing the cars ? A. Yes, sir ; well, I ought to qualify that by
saying that some of our oil cars we have recently loaded
back with some rails, I believe ; it was the intention to do it.

Q. That is a very small part, is it not ? A. Yes, sir.

Mr. Depew — I desire to call attention and have specially
minuted the 4th section of an act incorpor ating the Hudson
E. E. E. Co., which prohibits the building of a road east of 8th
avenue or Hudson street in the City of New York, or in any
street or avenue without consent of the Common Council, and
the Act of 1859, by which the Legislature prohibits the Harlem
Eailroad from running steam below 42d street.

Mr. Steene — Hadn't we better have on the minutes pre-
cisely what we want of Mr. Eutter ? We want from Mr. Eut-
ter a statement of the amount of the rebates paid within the
past three years to the Standard Oil Company, Chai-les Pratt
&Co., toBostwickand others, who shipped under the Standard
Oil contract, or Standard Oil arrangement ; also to furnish
the same statement as to drawbacks paid these various parties
under the Standard Oil arrangement within the past three years,
and as to overcharges ; likewise to furnish to the Committee
the amounts that have been paid by the New York Central
& Hudson Eiver Eailroad Company, to Mr. Eastman and
others, as cattle eveners, from the time of the commencement
of the cattle evening contract until its expiration ; we want,
also, the amount paid by the New York Central & Hudson Eiver
Eailroad Company, to Whitney and Twombley', or Twombly,
for elevating services, covering the Buffalo elevator as well.

639

By Mr. Steene :

Q. You pay a certain amount, don't you for elevating ? A.
Yes, and they pay back a certain amount to us.

Q. Of the amount that they have received ? A. Yes, sir.

Mr. Sterne — Also the amounts received by the New York
Central & Hudson River Railroad Company, under the
lease from Whitney, and Twombly since the contract has
been in force ; the same information as to receipts from and
payments to Twombly individually, since the death of Mr.
Whitney.

The Witness — Everything that you have asked me up to
this time was with Twombley ; what you want now is what we
paid Whitney and Twombley.

Adjourned to Monday, June 23d, 1879, at 11 o'clock a. m.

New Yore, June 23, 1879.

The Committee met pursuant to adjournment.

Present : All the members of tiie Committee except Messrs.
HusTED, Low and Wadswobth.

E. L. Craioford, sworn.

By Mr. Sterne :

Q. What is your occupation ? A. General Eastern Freight
Agent of the New York Central & Hudson River Railroad.

Q. You are under Mr. Rutter's direction, are you '? A. Yes,
sir.

Q. Have you charge of the despatching of the trains ? A.
No, sir.

Q. Explain to the Committee what your special function
is ? A. I have general charge of the detail of the westbound
business regarding rates, classification, way billing, and so on,

Q. How about the eastbound business? A. I have nothing
to do with the eastbound business.

Q. Haven't you under your cbarge the various chiefs or
9,gents of the f£!,st freight lines-^the h§ad^ pf the fast freight,

640

lines, whatever their names may be ? A. I don't understand
the question.

Q. You have )'unnlng over yourUne a number of fast freight
lines — White Line, the Blue Line, the Merchants Despatch,
and others ? A. Yes, sir.

Q. These, severally, have agents or superintendents, have
they not ? A. Yes, sir.

Q. Are they under your direction ? A. Somewhat in regard
to rates.

Q. To what degree in regard to rates ? A. They take what-
ever rates the railroads agree on, and work oa those rates ; I,
as the representative of the New York Central, agree with the
other trunk lines what the rates shall be, under the general
supervision of Mr. Kutter and other otScers of the roads that
occupy similar positions that he does, and we give these rates
to the line agents.

Q. Are these rates observed ? A. Yes ; I think they are.

Q. Since when have they been observed? A. They have
been generally observed for the past two years very strictly.

Q. Since the pooling arrangements have gone into effect ?
A. Yes, sir.

Q. Have you any means or method of checking them to ascer-
tain whether they are observed or not ? A. As far as our road
is concerned ; yes.

Q. How ? A. Because the vouchers that necessarily arise,
if they make any different rates than that authorized by us
have to pass through my office.

Q. Don't those vouchers, even within the past two years, re-
present rebates and overcharges ? A. Yes, sir.

Q. Doesn't that practically amount to a special rate, if an
overcharge is made ? A. There are a great many overcharges
that arise, naturally, from doing business.

Q. I eliminate those ; Mr. Butter, I think it was, told us
they didn't repay iive per cent, actual overcharge ; leaving
those out of sight an agreed overcharge is just as much a
special rate, is it not, as a reduction from the tariff
rate ? A. It amounts to about the same thing.

Q. You have these agreed overcharge accounts right
straight along, have you not, with all these lines ? A. No, sir;
not of late ; we used to have.

Q. Haven't you had, within the last throe months ? A.

641

There are overcharges that arise on special rates that are
made by authority of the trunk liL^es through Commissioner
Fink ; that I presume, some are running now ; I know of one
or two that I can recollect ; and there may be others.

Q. What are those ; those are to meet special cases, are
they ? A. ?es, sir.

Q. Then in addition to the tariff rates as they are fixed
now on westbound freight ; there are recognized overcharge
rates for the purpose of diminishing a special freight charge ?
A. It is made for the purpose of getting businesp.

Q. I understand ; it is all made for the purpose of getting
business ? A. Allow me to illustrate ; take, for instance, the
article of empty lard tierces ; that is one thing that I recollect
Mr. Fink has made a special rate on ; they are a very cheap
article.

Q. Don't waste time in giving an- explanation that is not
covered by my question ; my question relates simply to the over-
charge account ; if there is a special rate made which is the
same to everybody, and enters into the tariff, I do not want
to know anything about it; does that enter into the tariff ?
A. Does which ?

Q. That illustration which you were about to give me ? A.
Does it enter into the tariff ?

Q. Yes. A. No, sir ; it is below the tariff rate.

Q. To everybody the same? A. To anybody and every-
body, yes, sir

Q. (Interrupting ;) then I don't want to know anything about
it ? A. (Continuing) — that should happen to ask ; there is
only one man that I know of that has asked for it, because it
is an article that won't bear but a very low rate ol freight.

Q. There are other overcharges that are allowed under con-
tract, are there not ? A. There may be some by the western
roads ; I cannot speak of that knowingly, only from hearsay.

Q. I am speaking now of westbound freight? A. Yes, sir;
I don't refer to anything else.

Q. Did not you allow on your overcharge books, within the
last six months, large amounts in the way of rebates and draw-
backs ? A. For local business.

Q. For business going westward? A. No, sir ; not large re-
bates ; there may be some isolated cases ; but they are rare.

642

Q. And these are made by the line agents are they not, the
fast freight line agents ? A. Not necessarily.

Q. Are they made by you ? A. They may have been ; not
made by me personally, but through my authority.

Q. What record do you keep of those sjiecial rates that you
have made since the pooling arrangements went into effect?
A. None ; we have no record except those joa have in the
desk there.

Q. Are there any book or books in which you keep a record
of your special contracts made under the name of di^awbacks ?
A. No, sir ; not since the date of those you have on your
table.

Q. Didn't you make considerable reductions fioai tariff rates
a year ago on western bound freight to special shippers ? A.
I don't know ; I was in Europe a year ago ; and I can't say
what was done.

Q. Within the year since your return — Field, Leiter & Co. ;
let me help your memory? A. There may have been special
rates made ; yes, for specific shipments ; but there is not that
system of making special contracts, what we call " time con-
tracts," like it was previous to the pooling arrangement.

Q. The pooling arrangement, then, as I understand it, has
doue away with the " time contracts" effectually ? A. En-
tirely.

Q. But it has left the special rate, on special shipments, still
alive, lias it not? A. No, sir.

Q. To what degree alive, if not fully alive ? A. Not alive
that I know of; but I am speaking of a special shipment that
may have been made six months ago or four months ago, some-
tliing of that kind, not still running.

Q. Don't you remember any special shipments made to
Field, Leiter & Co., made at considerable reduction below
schedule rates ? A. No, sir ; tliey have not been shipping by
onr road for nearly two years.

Q. Well, to any other Chicago merchants ? A. I don't re-
member just now.

Q. Have special rates been made that you know of from
Boston to any of those houses ? A. Not to my knowledge ; I
don't control the Boston business.

Q, Don't you control it from the moment it reaches
Albany ? A, No, sir,

643

Q. You haven't told us how you control the fast freight lino
agents as to the special rates? A. I hardly know how to ex-
plain, only that thej- would not give a rate that they expected
the New York Central road to pay without some authority
to do it from the New York Central man.

Q. Have you been applied to, and given authority to these
various agents ? A. Yes, sir : frequently.

Q. Within the last year or two ? A. Yes, sir.

Q. For instance, Mr. Gagan ; haven't you, Avithin the past
year, given to Mr. Gagan any authority to make a special
rate for goods forwarded by the Merchants Despatch ? A. I
don't know such a man.

Q. Who is the -agent of the Merchants Despatch, at ^35
Broadway? A. Mr. Geagen.

Q. Haven't you given to him any authority to make any
special rate within the past year ? A. I may have done so,
but I don't recollect any specific case.

Q. Have you to Mr. Bond, the agent of the Blue Line ?
A. Perhaps I have.

Q. On special shipment to what point ? A. His particular
point is Chicago ; his speciality is Chicago business ; perhaps,
if I have given any rate at all, I have given it on Chic;\go freight,
or beyond.

Q. That would be covering first, second, third and fourth
class, would it not? A. Not necessarily.

Q. What would it covet? A. It would depend entirely on
what the man shipped, for whom the rate was applied.

Q. Then it would be for special shipments? A. Yes, sir.

Q. What rule had you, say within the past year, in relation
to acquiescing, or refusing to acquiesce as to a special rate to
anybody? A. The rule was to refuse.

Q. No ; but when you acquiesced, on what basis did you ac-
quiesce? A. That depended entirely on the circumstances
under which it was presented.

Q. What are the circumstances that appeal to your judg-
ment ? A. Well, it is sometimes competition of the other
trunk lines, or the trunk roads ; sometimes water competition ;
sometimes the party will buy from other cities than New York,
because he can buy the same article, perhaps, a little cheaper.

Q. Because the rate is a little lower ? A. And the rate is a

644

little lower from Philadelphia and Baltimore, not from Boston 5
there are various circumstances of that nature.

Q. And then you are compelled to meet these circumstances
to-day, after the pooling arrangements, if not quite as much.
at least to some degree, just as you had to meet those condi-
tions before the pooling arrangement went into effect ? A.
No, sir ; not to the same extent ; before the pool was formed,
there were no rates of any consequence at all.

Q. Tell us how long you have been connected with the New
York Central & Hudson Kiver Railroad ? A. A little over nine
years.

Q. Then, your memory of course runs back to a period of
time when there were no pools made betwen the trunk lines?
A. Not when there were no rates.

Q. Not when there were no rates ; before the pool was ar-
ranged the rates were agi'eed to by the trunk line managers ?
A. Yes, sir.

Q. Did you represent the New York Central in any of those
meetings ? A. Sometimes.

Q. How were the rates fixed ? A. By agreement.

Q. And the agreement was arrived at by contest between the
roads, wasn't it? A. No, sir ; not by contest; when the rates
were agreed to, we generally tried to get the best tariffs we
could.

Q. At those various conferences for agreements, who repre-
sented the roads, and how many roads were represented at these
conferences ? A. There were usually four.

Q. How was the agreement arrived at ; by unanimity or by
majority? A. Generally by unanimity.

Q. If there was not unanimity, there was no agreement ; is
that it ? A. I never knew a case where there was any dis-
agreement as to the tariff ; they were all about of the same
opinion on these subjects.

Q. Suppose a case had arisen in which you had stood out
against the decision arrived at by the Baltimore & Ohio, by
the Pennsylvania, and by the Erie Company, would you have
considered yourself bound by the conclusions arrived at, at
that agreement, although you had not acquiesced therein,
simply because you had taken part in the conference ? A. No,
sir ; 1 would not have considered myself bound to follow their
agreement unless I agreed to it.

645

Q. Therefore, your understanding was, or is now, that un-
less they all acquiesce, there is no agreement as to the party
that fails to acquiesce ? A. Yes, sir.

Q. Mr. Fink told us the other day that the agreement as to
differences of Philadelphia and Baltimore, as compared with
New York, is larger than it has been since the pooling ar-
rangement ; is that so ? A. It was a great deal higher before
the pool was formed ; I don't know how long before the pool
was formed that it was higher ; but I have known it, I think,
as high as 15 cents on first class between here and Phila-
delphia.

Q. Agi-eed rates ; but were they adhered to at all, for any
length of time ? A. I suppose they were agreed, because the
New York roads could not help themselves.

Q. When you say they could not help themselves, you mean
to say they would have gone on with the railroad war or the
railroad competition if the New York roads had not acquiesced?
A. I suppose that difference would have been made, no matter
where the roads here would have put their tariffs ; the Phila-
delphia roads would have put theiis down that relative differ-
ence.

Q. You don't answer my question ; is it because the Penn-
sylvania and Baltimore roads refuse to acquiesce in an agtee-
meut to stop competition, unless you acquiesce in that differ-
ence ? A. I don't know about that.

Q. When you say yon could not help yourself, what do you
mean, if it is not that ? A. I mean bj^ that, if the New York
roads insisted on having the same rate that Philadelphia had,
it would have to bring on a fight; what we call a railroad fight.

Q. And that you wanted to avoid ; and, therefore, you ac-
quiesced in these differential rates ? A. I presume that was
the case.

Q. Tell us why you acquiesced in the same rate from Boston
as from New York ? A. That was before my time ; I can't
answer that question.

Q. Did you never question the justice of that? A. I never
did.

Q. You thought that was fair ; will you tell us how much
of the tonnage of the New York Central goes to Boston as com-
pared with that which goes to New York? and how much of it

646

goes from Boston as compared with that which goes from New
York ? A. I am not prepared to say.

Q. Have you no means of knowing ? A. No, sir ; I could, I
suppose, if I would go (o work and iuvestigatethe matter; but
I have not the figures in my office.

Q. Have you any impression ? A. No, sir.

Q. No impression of the part of the traffic that goes from
New York as compared with that which goes from Boston ?
A. That is a matter of figures that I do not wish to express an
opinion on.

Mr. Shipman — Mr. Fink gave you that statement on Satur-
day.

Mr. Sterne — No, he did not.

The Witness — That is a matter on which I do not wish to
express myself.

Q. I have asked you as to the Blue Line : would your last
answer be the same as to your acquiescence in the demands
from Mr. Hall, of the Eed Line, for special rates within the
past year? A. All the lines on our road alike.

Q. ft would cover the White Line and the Canada South-
ern as well as all the others ? A. Yes, sir.

Q. You don't remember any circumstance you can give us of
such special rates ? A. No, sir.

Q. When you speak of the condition of competition with
other roads, do you mean to say you have discovered since the
pool has been in operation, that the pooling terms were not
strictly adhered to? A. No, sir; I can't say that I did.

Q. Did you suspect that they were not? A. I had a sus-
picion of that kind ; yes, sir.

Q. And one of the methods by which they were not adhered
to, was underweighing, wasn't it ? A. Not by us ; that we con-
sider the meanest kind of cutting rates.

Q. Can there be any underweighing without connivance of
the railroad company ? A. Not on our road.

Q. Can there be on any well regulated road ? A. I cannot
speak for any road but ours.

Q. Isn't all freight weighed, as a general rule, at the freight
depots before it is sent out ? A. It is supposed to be.

Q. Therefore, when there is underweighing, it may be a
swindle on the part of the shipper, but it must be connived

647

at on the part of some railway official or railway employe ;
isn't tliat so ? A. Yes, sir.

Q. The stations where tliere are no scales are very rare — it
would be merely local stations of no consequence ? A. We
have scales at all our stations ; that is, in New York I am
speaking of.

Q. Has not every well equipped railway a scale at every
important station? A. They ought to have.

Q. The Merchants Despatch is a non-co-operative line, isn't
it ? A. Yes, sir.

Q. Has it furnished any cars within the past four years, or
five years to the New York Central Railroad ? A. I think not
to the New York Central Railroad ; they have their own cars.

Q. Has it put any new cai's on the tracks of the New York
Central Railway? A. I think not; not to my knowledge.

Q. You repair their old cars in your shops, don't you ? A.
I don't know.

Q, You fill their cars with their freight only; or, do you
fill your own cars just as much with their freight, and despatch
them ; would you fill their ears with their freight ; or do j'ou
fill your own cars with their freight just as much ? A. We
usually load their cars; and, if we don't have enough oars, put
it in any other line car that we happen to have — through car.

Q. What you call a co-operative line car is your car ? A.
Not necessarily ; it may belong to some road west of us.

Q. The line is an organization to which you contribute a
certain number of cars of your own ? A. Yes, sir.

Q. You pay all the expeases of the Merchants Despatch,
don't you ? A. Not that I know of.

Q. You pay all their drawbacks ? A. Not that I know of ;
I think they pay them themselves.

Q. Don't you repay them their drawbacks ? A. We would
repay our proportion if we had agreed to any of them ; but we
do not pay the whole.

Q, Now, tell me do you refuse to pay the drawback unless
you had previously agreed in writing or verbally, to each par-
ticular drawback? A. Not before the pool was formed, we did
not ; they had, as all of our lines had, through me generally,
authority what to do.

Q. To what degree to cut — is that it ? A. We agreed to cut,
to keep them all on the same basis in cutting, not to let one

648

cut against the other, was the object ; they are all competi-
tors, after they get west of us, and if leit to themselves would
frequently cut the freight that would otherwise come over our
road anyhow.

Q. Didn't that, in point of fact, frequently happen anyhow?
A. No, sir ; it is very rarely done.

Q. It could not be generally avoided, could it? A. In the
multiplicity of special rates I suppose it was done sometimes ;
but they are rare instances.

Q. In sending out a freight train, how do you make it up?
A. I don't run the running part of the road, the loading or the
handling of freights at all, or the despatching of trains ; I have
nothing to do with that part of the business.

Q. Don't you know all about it? A. Only in a general
way.

Q Do you put Blue Line cars and Eed Line cars, and
Merchants Despatch cars, and New York Central cars all in
one train ? A. All in one train ; yes, sir.

Q. And you send them out from the depot ? A. Eight out
from St. John's Park or Thirty-third street.

Q. And local cars for local points as well as cars for through
points in the same train ? A. Sometimes they have local
freights on the same train with the Fast Freight Line freights.

Q. You drop those cars at different points with your Ffist
Freight Line cars, don't you ? A. Yes, sir.

Q. For instance, in sending out a train to go to Chicago,
Milwaukee and Cincinnati, you would have the various line
cars m such a train — a train of forty-five cars — and you would
have also cars for local points, wouldn't you ? A. Yes, sir.

Q. And those cars would be dropped at those local points ?
A. Yes, sir.

Q. So the same engine would pull the through freight as the
other ? A. Yes, sir.

Q. Wasn't that the general rule ? A. No, sir ; that is the
exception ; we try to make up a full train of through freights.

Q. All through freights, if you can ; but isn't it an excep-
tion because you have less local freights than through freights ?
A. I dont't know that that is the fact.

Q. What is the fact about that; how does your local freight
compare with your through freights ? A. I don't know ; I
haven't charge of the local freight at all.

649

Q. How many of your cavs do you send out empty, com-
pared with those you send out full, on westbound ? A. I
could not tell you that either.

Q. Who can, connected with your department? A. I sup-
pose the depot master could or the train despatcher.

Q. Don't you know that all the petroleum cars go back
empty, and all the cattle cars go back empty ? A. 1 presume the
cattle cars do, because there is no cattle shipped from here ;
and oil cars go back empty because there is no oil shipped from
here.

Q. No oil shipped and therefore the oil cars go back empty ?
A. I presume they do ; but I don't know.

Q. And the grain cars go back what proportion empty ? A.
The grain cars are loaded with merchandise.

Q. So many of them as you have loads for ? A. Yes, sir.

Q. And those you haven't loads for you send back empty ?
A. It is frequently the case we have to send to Albany to get
cars to load — bring empty cars down to load them.

Q. That is because in Albany you keep your empty car
station? A. Because we have more freight to send west than
we have cars down here sometimes.

Q. That was only at certain seasons of the year ? A. I said
sometimes.

Q. Only very rarely, isn't it ? A. Yes, sir.

Q. Who fixes or who acquiesces in the special rates, or
cut rate, or drawback on eastbound freights ? A. I don't
know anything about eastbound freight.

Q. Is there any occasion for lightering your westbound
freight that comes from jobbing houses in this city ? A. Yes,
sir.

Q. That is because you h aven' t room enough in St. John's Park ?
A. No, sir ; it is for the accommodation of the public that we
lighter that freight, and to bring the freight to New York that
would otherwise go to Philadelphia or some other point where
no lighterage charge is made.

Q. There is no lighterage charge made in Philadelphia or
Baltimore? A. Not that I know of ; I believe not.

Q. They lighter there, too ? A. I believe not.

Q. Why don't they ? A. Because it is differently situated
from New York.

Q. Tell us how ; why is there no occasion to lighter in
70

650

Philadelphia or Boston ? A. The warehouses are not situated
around a harbor as they are here in Philadelphia ; it is im-
possible to cart freight from Robinson's stores in Brooklyn over
to New York; it has to be h'ghtered.

Q. Lightering costs more than drayage ? A. No, sir ; I
think it is less.

Q. Therefore it is an advantage here to a warehouse situated
at the river for the purpose of reducing that expense, isn't it ?
A. There is not room enough in New York for them ; if these
warehouses were not situated there, this freight would be in
some other city very likely, and New York would lose the
trade entirelj'.

Q. Isn't it because in Philadelphia the Pennsjdvania road
has created terminal facilities which bring the warehouses
and the ships and the railways together ? A. I think it is
true to some extent that Philadelphia gives the Pennsylvania
road a very much greater advantage than New York City gives
the New York Central road.

Q. You think so ? A. Yes, sir.

Q. Don't you know that New York City gave to the New
York Central last year, by resolution of the Common Council,
the right to run its tracks over the Belt Line and connect it
with any wharf that they saw fit ? A. I believe that is the
fact ; I don't know that it is.

Q. And that you failed to avail yourself of it, except as to
the one line at the White Star pier ? A. I believe so ; I think
there is one other steamship line that has a track or is about
to have one.

Q. Therefore it is true that New York City has afforded in
that way, by resolution, every facility that Philadelphia, by
any possibility, could have afforded ? A. I think it is ques-
tionable whether that is a privilege.

Q. In Baltimore you remember, don't you, when the Balti-
more & Ohio Eailroad hadn't its great terminal facilities at the
wharves of Baltimore? A. No, sir; I never have known them
on the westbound business when they were in much worse shape
than they are now.

Q. You know that the point where the Baltimore & Ohio
takes its westbound freight and delivers its eastbound freight
is not the actual terminus of that road but an extension of the

661

road ? A. I cannot tell much about that ; I have never ex-
amined into the facilities there.

Q. Then you don't know whether the increased facilities
that Philadelphia and Baltimore have over New York tor-
mini arises from the railway or from the cities doing the
work ? A. No, sir ; I can't speak positively on that subject.

Q. If the railway did it, then the railways did more for those
cities than our New York railways did for New York ? A. I
suppose so.

Q. Have you noticed any change in the past few years as to
your through traffic from New York westward ? A. In what
respect ?

Q. "Whether it is larger or less. A. I think it is growing
every year.

Q. And your eastward traffic also ? A. I don't know any-
thing about eastward traffic.

Q. Does that include the local as well as the through ? A.
I know nothing of the local traffic either.

Q. Have you had anything to do with making the classifica-
tions ? A. I have one ; yes.

Q. Can you tell us on what principle you make your classi-
fication between the first and fourth class and the subdivision
of the fouith class ? A. It depends entirely on the article ; the
value of the article, the bulk, the weight, and a great many
things of that kind.

Q. You limit your liability when you accept freight by
special bills of lading ? A. I don't understand that question.

Q. You limit the liability of your company, do you not?
A. On some articles.

Q. That is on high priced articles ; you always do, do you
not ? A. Not necessarily on high priced articles.

Q. On articles that are likely to break ? A. Brittle, yes ;
something of that kind.

Q. Articles that are liable to spoil on your hands ? A. Yes,
sir ; perishable articles.

Q. Do you know anything about the organization of the
Merchants Despatch Company ? A. No, sir.

Q. You don't know by what arrangement they run their cars
over your line? A. I have never seen the contract.

Q. They hand j'OU in their freight and you make out the
bills; is that it? A. The freight is delivered to us by the

652

shipper and we way-bill the freight and handle it just as if it
was our own freight.

Q. And then you make out the bill in accordance with the
contract that they have made ? A. If we have authorized it ;
they do not make any contracts except as we authorize them.

Q. When you have so authorized them you make out the
bill ? A. If we authorized a special rate ; it is generally billed
at the tariif rate and then rebated.

Q. Why is that done ? A. It is for several reasons : one is
on account of the bill maker ; when we were making these
special rates it would have been impossible for any bill maker
to carry those special rates in his head or on a sheet of paper ;
and they had to have some guide, and that was the tariff and
classification ; we found it easier and more accurate to do that
than to attempt to bill it at the special rates.

Q. And the other reason is secrecy, isn't it ? A. It would
be now ; but there was no secrecy at that time ; the spacial
rates were the rule rather than the exception.

Q. Now, for instance, take those two cases now before us ;
it appears that on June 28th, 1876, a contract was made with
E. Booth, of St. Louis, to carry his first, second, and
third class, at 50 cents a hundred ; fourth class, at 40 and his
special class at 40, through the Merchants Despatch Trans-
portation Company ; to run to June 1st, 1877 ; and, on the same
day a contract was made with Brunswick Brothers, to the same
point, to carry their first class freight at 60 cents, their second
class, at 55 ; and their third class, at 50 ; their fourth class, at
45 ; to run to the same date, June 1, 1877 ; either from Boston
or New York ; now, you would not want Brunswick Brothers
to know what Booth's rate was, Avould you ; he wouldn't pay
you his rate, would he ? A. If we had billed it, it is not likely
he would have known ; if we had billed those two contracts at
the special rates, it is not likely that either would ever know
what the other had.

Q. Why not ? A. How could he find it out?

Q. From the man that makes out the bills, or from any one
of the people in the employ of either one of those houses ? A.
That don't amount to anything at all, unless he had seen
the expense bills of those two parties in St. Louis, or what
each had paid; it is one chance in a thousand that they would
ever have found out anything about it ?

653

Q. Then, the drawback account don't arise from the desire
to give additional secrecy to the arrangement ? A. Not with
me ; I may feel differently on that point from others.

Q. You did not communicate, did you, for instance, in such
a case as that, Booth's rate to Brunswick Brothers ? A. Not
probable ; no, sir ; not likely.

Q. You would not be likely to do such a thing as that ? A.'
No, sir.

Q. You would consider that unbusiness-like ? A. Yes, sir.

Q. Would you consider it business-like on the part of Booth
to have told Brunswick what his rate was ? A. No, sir ; I
would not ; but that is frequently done.

Q. You would consider that a failure on the part of Booth
to keep his implied contract with you to be secret about it ?
A. Yes, sir.

Q. Throughout this book of the Merchants Despatch, dif-
ferent rates were given to different people to run to the same
time and from the same time ; how did that occur ? A. Some-
times we would make a different rate with the same shipper
several times during the day — the same day ; it depended a
great deal on how strong a bear be was in rates.

Q. The particular shipper was on rates — take the case of a
man who didn't come to you for any special terms at all, or to
any one of those fast freight lines, then what would you charge
him ; the schedule rate ? A. No, sir ; not necessarily.

Q. Don't answer me '' not necessarily;" but, what was your
rule about it, if you had any ? A. There were many shippers
who never asked us for a rate, that got as good a rate as any-
body else got.

Q. Could you give us an instance of any such shippers who
never asked you for a rate and who got as good a rate as the
lowest rate you gave to that point ? A. I don't intend to
say never asked ; but seldom.

Q. Then you don't mean what you said a moment ago, that
a man who never asked for a rate got as good a rate as some-
body who did ask for it ? A. By never, I mean during this
irregularity of freight.

Q. Suppose a shipper buying goods for Chicago during .the
period of this general demoralization of rates, would ship
$10,000 worth of goods, tirst class, to Chicago, and never come
near you for a rate, wouldn't you charge him the then agreed

654=

schedule rate ? A. If lie was a man that shipped that $10,000
worth of goods and never shipped any more, we probably
would.

Q. Did you, in every case, when goods came to you without
any rate being named, enter into inquiry as to whom they were
shipped and what they were shipped for, and then make a
special rate upon your own independent inquiry ? A. There is
always so:nebody to look after freights that tells us all about
it ; we don't have to inquire who it belongs to, or anything of
that kind.

Q. Take the case of a man starting in business in Chicago ;
he knows nothing about your special rate arrangement or any-
thing of the kind ; he comes to the City of New York and buys
a bill of goods amounting in all to $10,000 worth ; ships them
over your line ; he asks for no special rates, assuming that
they would be billed at the schedule rates ; don't you bill them
then, at the schedule rates ? A. Yes ; we bill nearly all our
freight at the schedule rates, whether they had a contract or
not, as I explained before.

Q. Do you give him any rebate or drawback? A. If we
agree to.

Q. If they never asked for them ? A. If he had never asked
for them, probably we would not have done il;.

Q. Take the case of this Chicago shipper that I have sup-
posed shipping $10,000 worth of goods, sending it over your
line to Chicago, and he finds it having been billed to pay 60,
50, 45 and 40 on his goods, and that his next door neighbor
paid 50, 45, 40 and 8U on his, by special contract ; when be
finds it out, do yon give him a drawback equivalent to his next
door neighbor's difference in rates ? A. If he was as big a
shipper he would probably get it.

Q. On future shipments ? A. And that particular shipment
dated back ; and take in his sliipments in the future.

Q. And you would actually give him back his money ? A.
Yes, sir.

Q. Did that ever happen? A. I suppose thousands of
times.

Q. Then, whether he gets his money back is whether he
finds out that another man has a lower rate? A. That was
about the way all business was done at that time ; we had no
regular rates ; we got the best we could.

655

By Mr. LoOMis :

Q. The agents of the fast freight lines of tliis city are simply
agents to solicit business, are they not? A. That is their duty.

Q. They don't make any rates ? A. Not of themselves ; no,
sir.

O. Or contracts? A. No, sir.

Q. When they solicit business they inform the person from
whom they solicit that their goods can be carried over their
line at such aud such rates, which they have received from you ;
is that the fact ? A. Yes, sir ; that is the fact.

Q. If, at the time Mr. Sterne referred to when he mentioned
the firm of Field, Leiter & Co., and other large shippers at the
west, any specific contracts existed with them, were they or not
made with western roads?

Mr. Stbkne— He says not.

Q. Did you hear my question ? A. I heard you, but I didn't
understand it.

Q. I ask whether, if specific contracts less than the tariff
rates existed with Field, Leiter & Co., and other shippers,
whether such contracts had not been made by the western
roads, and simply ratified by the eastern roads? A. At the time
he spoke of, I know of no contract at all, either by the eastern
or western roads.

Q. You knew of none yourself at all ? A. No, sir ; they were
not shipping by our road.

By Mr. Steenb :

Q. You spoke of Field, Leiter & Co.? A. Yes, sir.

By Mr. LooMis :

Q. When the Committee of the trunk lines meet to fix the
tariff rates and a disagreement arises, how is that disagreement
adjusted ; isn't it by the arbitration of Mr. Fink, the Commis-
sioner ? A. Yes, sir ; it is now.

Q. Since this, what is called "pooling" arrangement has
been in existence, have you had or considered that you had,
any authority to make rates varying from the rates fixed by
this arrangement ? A. No, sir ; the agreement was to maintain
the rate that Mr. Fink authorized.

Q. The occasion for lighterage of western bound freight going

656

from the City of New York, is because of the peculiar situation
of that city, is it not? A. Yes, sir.

Q. Nearly surrounded by water, with warehouses on its
shores, and on the adjacent shores ? A. Yes, sir.

Q. To which the tracks of the railroad companies can't
reach ? A. Yes, sir ; cannot reach.

Q. Do you know whether or not it is practical to run trains
on to these different piers projecting from West street into the
North river along the line of the Belt road ? A. That is a
matter of opinion ; I don't think so.

Q. The curve is too sharp to admit of it? A. Yes, sir

Q. And the presence of freight cars on the docks would ob-
struct all the other business of the line?

Mr. Sterne — Don't lead the witness quite so much.

The Chairman — He has testified practically that in his
opinion it is impracticable.

Q. The expense of this lighterage is not added as a specific
item to the charge made to the shipper or consignee of the
goods, it it ? A. No, sir ; it is absorbed in the rate.

By Mr. Sterne :

Q. Don't they lighter goods in Boston ? A. No ; I think
not ; I never heard of their doing it.

Q. If it is impracticable to run whole freight trains to the
pier, isn't it perfectly practicable to run individual freight cars
to tlie piers drawn by horses ? A. I think it is practicable to get
into the dock of a steamship, but after you get into the dock,
the goods are on the floor of the dock, and the car four feet
high, to get into the door — there is the trouble I think we T\ill
have in handling freight on the docks of steamships ; you have
to have a platform to load from.

Q. What would be the difficulty of erecting platforms ? A.
It would spoil the dock for other uses.

Q. That part of it only, wouldn't it be ? A. I think the
docks, are too narrow to make any platforms.

Q. How wide a platform do you think it would require ? A .
I think our platform at St. John's Park is about sixty feet wide.

Q. That is because you have plenty of room, how wide does
a platform require to be? A. It would take a platform at
least twelve or fifteen feet wide, to handle freight off of a
steamship.

657

Q. Have you seen the method by which it is done in Phila-
delphia and Baltimore ? A. I have seen it, not iu Baltimore,
but in Philadelphia.

Q. How wide a platform have they there? A. I don't know ;
I never measured it.

Q. Is it wider than eight feet '? A. I think it is.

Q. Do you mean to say, in answer to the question put
by Mr. Loomis, that you have had no authority to make
special rates for two years past ? A. I mean to say that
it is my orders to follow the tariff that is authorized by Com-
missioner Fink, which is to him given by the Executive Com-
mittee of the roads. ■

Q. And yet you have, within the past two years, made spe-
cial rates to these various lines ? A. Might have done so on
special shipments.

Q. You have done so ; I want a categorical answer — yes, or
no ? A. Yes, I have.

Q. Is not the curve into St. John's depot quite as sharp as
at the piers ? A. I don't know ; I have never measured it.

Q. What is the widest street that you have around St.
John's depot ? A. I guess Hudson street is as wide as any of
them.

Q. How wide is that ? A. I don't know.

Q. Isn't it narrower than from the bulkhead line to the
eastern line of West street ? A. I don't know whether it is or
not.

Q. How many tracks do you run into your St. John's Park
depot, on Hudson street ? A. We have a track for each plat-
form ; I think there are five or six platforms.

Q. You run it out on some other street, don't you? A. No,
sir ; all out of Hudson street.

Q. Then there are no curves around ? A. It don't go
through at all.

By Mr. Bakeb :

Q. Do you say that those agents have no discretionary
power in making rates ; don't it sometimes happen that they
make rates that vary from your instructions, and afterwards
procure your assent or approval of them ? A. They generally
have to have the authority of some railroad to make rates ; it
is possible for some western road to give them authority to
71

658

make rates, but it is very seldom, if ever, done, on account of
their proportion of the through rate, but not from the trunk
line ; the New York Central.

Q. When they vary from your instructions they afterwards
get your approval of the change, I understand you ? A. Noj
sir ; they do not take any chances of that kind.

By Mr. LoOMis :

Q. They don't vary from your instructions ? A. No, sir.

By Mr. Blanchaed :

Q. To your knowledge, do any of the western companies at
Chicago, equalize dray age as between tlremselves? A. I don't
know about that.

Q. If you make a rate uniform from here to Chicago you
leave the drayage at Chicago to be settled locally, by the roads
at that point? A. That is a local matter ; yes, sir.

Q. In the manner in which the starting companies equalize
the difference of the haul here in New York?

Mr. Sterne — He don't know anything about that.

The Witness — If there is any diflfereuoe in the drayage be-
tween the two depots in Chicago, that is a matter that the roads
here have no interest m at all ; it is a local matter which they
settle between themselves.

Q. So it would not come into your tariffs here at all to ad-
just? A. No, sir; onr tariffs cease at the depots.

Q. So that, though you may make uniform rates from here,
you don't know that it is not done in Chicago ? A. I do not.

Q. Have you ever had anything to do with making rates
from the other cities — from Philadelphia or Baltimore? A.
Only generally.

Q. Have you had anything to do with fixing the differences
at those cities? A. No, sir.

Q. You don't know anything about why they were arrived at ?
A. I do not.

Q. Did you ever authorize any property billed at under-
weight? A. Never.

Q. Is it not frequently the case that merchants report under-
weights on their dray tickets ? A. I don't know whether it is
frequent ; it is sometimes done.

Q. Do you not know that they change the classification and

659

call one article by anotliev name in order to get a reduced rate V
A. Yes, sir ; that is often done.

Q. It is done so often that you have to giv^ special instruc-
tions to watch it and protect it '? A. There are certain houses
here that we pay particular attention to.

Q. Has the New York Central Railroad a westbound station
at Sixty-fifth street — will receive freight at Sixty-fifth street?
A. Not a regular station ; no, sir.

Q. At Thirty-third street ? A. Yes, sir.

Q. At St. John's Park ? A. Yes, sir.

Q. At Barclay street ? A. Yes, sir.

Q. At Piers 5 and 6 East Eiver ? A. Yes, sir.

Q. At Pier 18 North River ? A. Yes, sir.

Q. At Centre street for the Harlem road ? A. I don't know
about the Harlesm ; I can't speak for that ; but I know there
is a station in Centre street of the Harlem Road.

Q. Do you know how many lightering points you took freight
from within the last year ? A. We send all around the
harbor.

Q. Do you know how many points they actually took freight
from last year in addition to your stations ? A. I could not
tell. .

Q. Have you a station at Mott Haven or Port Morris ? A.
Not a New York Central station.

Q. Have you for the Harlem ? A. I don't know anything
about the Harlem.

Q. Do you know how many stations the Erie road has in
New York ? A. I think they have five or six, perhaps.

Q. Assuming that a sugar refiner is at a certain point in
Brooklyn, you send a lighter for it, do you ? A. Yes, sir.

Q. And include the lighterage from Brooklyn to Thirty-third
street in the rate ? A. Yes, sir.

Q. If a sugar refinery was correspondingly located at Phila-
delphia, would the railroad colnpany do that, or would the
shipper have to pay the lighterage or cartage ? A. My im-
pression is the shipper would pay the lighterage or cartage.

Q. Do you know how it is ? A. I do not know, I think a
number of refiners in Philadelphia have the tracks of the
Pennsylvania roads run right into their refineries.

Q. If they are not so located, you don't know whether the

660

shipper would have to pay or not ? A. I do not know posi-
tively.

Q. Were those tracks laid by the raikoads or the refiners in
Philadelphia ? A. T don't know.

Q. Do you know if the Erie has a station at Oak Cliff? A.
I don't know.

Q. At Weehawken ? A. I have understood so.

Q. At Long Dock? A. Yes, sir.

Q. At Twenty-third street ? A. Yes, sir.

Q. At Chambers street ? A. Yes, sir.

Q. At Palmer's dock, Brooklyn ? A. Yes, sir.

Q. At pier 8, East River ? A. Yes, sir.

Q. And in addition to that, also lighters from as many points
as your company ? A. Yes, sir : I presume they do.

Q. Do you know whether the number of westbound stations
at which the New York roads receive freight is five times as
great as the number at which the combined roads at Phila-
delphia receive freight? A. No, sir ; I dou't know that.

Q. Do you know whether it is ten times as many? A. I
don't know ; I never calculated it.

Q. Do you know whether the Pennsylvania road has a
station here at piers one and two ? A. I don't think it is one
and two.

Q. Piers five and six ? A. I think so ; it is down in that
neighborhood.

Q. At Harriman's dock, Jersey City ? A. Yes, sir.

Q. At Jersey City proper ? A. Yes, sir.

Q. At pier 38 North Eiver ? A. Yes, sir.

Q. And lighter from as many or more points as the Erie
and New York Central do ? A. About the same thing.

Q. And the Baltimore & Ohio road receives its freight from
all those stations, and lighters also from the City of New York ?
A. Yes, sir.

Q. Do you know how many more stations freight is received
at in and around New York, than in Baltimore ? A. I do not
know.

Q. Do you know how it is as compared with Boston ? A.
We have more, a great many more, but I don't know how
many more stations tha,n Boston has.

Q. All those stations and lighterage facilities in New York

661

are provided by the railroads in New York, are they not ? A.
They are, as I understand it.

Q. When yon gave two rates to St. Louis was Mr. Bruns-
wick a billiard table manufacturer ? A. I don't know ; I never
heard the name before, that I recollect.

Q. When you made special rates, if Brunswick was a billiard
manufacture!', and he shipped large thin slabs of slate and
billiard cloth, being most expensive of upper and lower classes,
would you take that into consideration, and perhaps name a
different rate, when rates were being cut ? A. Articles like
that don't come in such strict competition as dry goods, and
things like that, and we could always get a better rate when
those things were considered.

By Mr. Steene :

Q. Do you know whether either Mr. J. P. Willin or E.
Wilder & Company, of Louisville, is a billiard manufacturer ?
A. No, sir ; I don't know.

Q. You don't know the business of either of those gentle-
men ? A. No, sir.

Q. Yet, it appears on the 18th July, 1876, on a contract
made on that day, to run to January 1st, 1877, you gave to
Mr. J. F. Willin, of Louisville, a rate of -thirty-four cents for the
first three classes, and twenty-four cents on the two last
classes ; but to E, Wilder & Company, of Louisville, on the
three first classes of thirty cents a hundred, and on the two
last classes of twenty-four cents, running to the same period ;
therefore, the distinction there was not due to any difference
of character or value of the goods, was it ? A. It might have
been.

Q. Have you any recollection upon that subject at all ? A.
No, sir.

Q. It equally appears, for instance, that you gave, on Jan-
uary 1st, 1877, to W. F. Block & Brother, of Louisville, a rate
of thirty-nine, thirty-nine and thirty-sis cents on the three first
classes, and to L. & G. Brown & Co., of Louisville, a rate of forty
cents and forty cents, both running to July 1st, 1877 ; do you
know any distinction between their business or the volume of
their business ? A. I don't recollect it now.

Q. One was a billiard manufacturer and the other was not,
was he ? A. They may have both been, for all I know.

662

Q. Do you know what business Eagen, Boyd & Co. of Mon-
treal do ? A. No, sir.

Q. Do you know what business Braler & Co. of Montreal
do? A. No, sir.

Q. Yet it appears on the 25th of May, 1876, you gave one
a rate of 50c. a hundred on first class and the other 30c. a
hundred on first class special shipments ? A. Gave them the
best rate we could — all of them.

Q. Here is a difference of 20c. a hundred on one class — how
do you account for that ? A. I guess you will find some worse
than that if you keep on.

Q. Made on the same day? A. While you are on that
point, allow me to explain that we have made special rates to
Montreal very frequently ; that is not in the pooling business,
and I have not been testifying in regard to Montreal at all ;
that is not what we consider competitive business with the
other trunk lines ; you will find contracts all along with them.

Q. Down to within a week? A. Down to the present
day.

Q. On Montreal, special rates ? A. We get the best rates
that we can ; it is in competition with Portland by water.

Q. Do you know of instances that goods were shipped from
New York to Portland and from Portland west at lower rates
than from New York, and went over your line afterwards at
lower rates than from New York straight west ? A. I don't
know that to be a fact.

Q. Do you know of instances of goods going from New
York to Boston and then shipped by your lines from Boston
westward to Chicago at lower rates than they could have been
shipped from New York over your line westward ? A. Only
from hearsay.

Q. I mean the combined route from New York to Boston
and from Boston to Chicago, are they lower than from New
York to Chicago over your line ? A. I only know that
from hearsay ; I don't know it.

Q. Don't you know that there was a condition of affairs
which made that possible for a considerable period of time ?
A. Yes, sir ; I can say yes to that ; made it possible ; but I
don't know that it was done.

663

By Mr. BliANCHAED :

Q. At the time that these special rates were made by you
westward bound, did you not know the character of the busi-
ness of those houses ? A. Invariably.

Q. Didn't the agents report to you the character of the
houses before they asked your approval of those contracts?
A. Yes, sir.

Q. And within the time that has elapsed of two years or
more you have simply forgotten the character of their business ?
A. That is the idea.

Q. Did you, or did you not, when you were making differ-
ent rates to different houses or uniform rates upon different
classes, did you or not take into account the proportion of
each class that from the character of the business of the
houses that they would be apt to ship? A. Yes, sir.

Q. If you gave four rates to a grocery house it would be
natural that much the largest proportion would be fourth class
freight ? A. Yes, sir.

Q. If you gave four rates to a dry goods house much the
largest proportion would be dry goods ? A. Yes, sir.

Q. And if you gave four rates to a paper establishment,
much the largest proportion, you think, would be second and
third class ? A. Yes, sir.

Q. And the same way with a hardware merchant ? A. Yes,
sir.

Q. And you took into consideration the character ef the busi-
ness of the houses and the average proportion in which they
would ship of the different classes ? A. Yes, sir.

Q. In giving rates to the west where you exempt the com-
pany from liability, do you not also have another rate and an-
other classification at which the earlier assumes that risk
in a great many cases ? A. For most all articles of that kind
there are two classifications.

Q. And has not the shipper the opportunity of electing
whether he will take the high rate at the risk of the carrier
or the low rate at his own risk ? A. Yes, sir.

Q. And he usually specifies which one he will take ? A.
Yes, sir.

66i

William Volckens sworn :

By Mr. So: erne :

Q. What is your business ? A. I am a ship broker.

Q. Of what firm are you a member ? A. Of Funch, Ed\ e &
Co.

Q. That is the largest ship brokerage house in this country?
A. Yes, sir.

Q. You make more charter parties and receive more con-
signments of ships than any other house in this country ? A.
Yes, sir.

Q. Do you know the rates at which charter parties can be
made from all the leading American seaboard cities ? A. Yes,
sir, mostly.

Q. How do the rates of charter parties and the sailing ves-
sels chartered from Liverpool to Boston, and going thence
laden with grain, compare with the rates from Liverpool to
New York, and from New York to Liverpool ? A. There is
very little goods come by sailing vessels from Liverpool to
New York, or from Liverpool to Boston more than there is
from Liverpool to New York except at very low figures ; all
the steamers tnke most all those goods ; the rates to Boston
are generally higher than to New York for sailing vessels, be-
cause sailing vessels very seldom find any goods at Boston, while
at New York there is mere nothing for sailing vessels; all the
stuff is carried by steamers at very low rates.

Q. How are the rates from Boston ? A. You refer to
grain ?

Q. Yes. A. Generally lower than from New York ; they are
3d. to 6d. at least, and I have known instances of a shilling a
quarter less.

Q. You say the majority of sailing vessels come out in bal-
last ? A. Yes, sir ; especially in the grain trade.

Q. To all ports ? A. Yes, sir.

Q. How are the rates irom Philadelphia to European ports
— grain rates compared with New York ? A. They are gen-
erally the same as from New York ; there are instances,
espdcinlly in the winter time, when there is ice in the Delaware,
when of course they are very much higher, but as a general
rule, they are the same as from New York.

Q. How are the rates from Baltimore to European ports ?

665

A. Grain freights from Baltimore to Evu-opean ports are gen-
erally 3d. to 6d. higher ; I have known instances of 9d. to a
shilling higher than from New York ; but now in the summer
time, when the canal brings so much more stuff to New York,
the rates are about the same as from Baltimore.

Q. In the siimmer the rates from Baltimore are about the
same as from New York? A. Not always, but sometimes;
frequently in the heighth of summer.

Q. How are the petroleum rates from those various cities to
Europe, as compared with New York ? A. From Boston
they commence shipping petroleum only last winter; very
seldom anything before this last winter and this spring ;
freights were about d. cheaper in Boston than here for oil.

The Chairman — 9d. on what ? A. 9d. on 40 gallons.

By Mr. Steene :

Q. 9d. per barrel ? A. No, hot per barrel ; forty gallons ;
a barrel holds 50 gallons.

Q. And from Philadelphia ? A. About two or three years
ago, freights used to be at least 3d. to 6d. higher than from
here, but for the last two years freights have been sometimes
lower in Philadelphia than New York, but now they are about
the same.

Q. Baltimore ? A. Baltimore are generally a shade higher ;
at present they are about the same as here.

Q. How is it as to live stock ? A. I have had very little
experience, as all the live stock is shipped from this port by
steamers, and I do not attend to steamers ; I have only charge
of the sailing vessels.

Q. The grain trade goes mainly by the sailing vessels ? A.
I should think so.

Q. It goes to Qneenstown for orders? A. Yes, sir; and any
other direct ports in England or on the continent ; last fall we
had a large export business to France, owing to the shortuess
of the crop, and likewise to the Mediterranean.

Q. The rates of insurance — Lloyds insurance, do you know
anything about them ? A, I know something about them ; yes,
sir,

Q. Tbay are the same to the several portp, iire iihej not ?
A. You mean frow the several ports ?
72

666

Q. Yes, from the several ports? A. Well, I have known in-
stances that in Philadelphia vessels could not be insured, which
could not be insured in New York.

Q. At lower rates ? A. Vessels which they do not insure
here, can be insured in Philadelphia sometimes.

Q. I am speaking now of the rates of insurance ? A. That
covers the rates of insurance ; if for instance they ask one per
cent extra here, and you can insure a vessel in Philadelphia,
of course, there is a difference ; otherwise I should say the
rates of premium are the same from all ports, as far as my ex-
perience goes.

Q. Have you noticed a change in the currreut of the grain
trade within the last few j'ears? A. How do you mean ?

Q. In favor of other ports as compared with New York?
A. Baltimore has picked up a very large trade which they had
not before, in grain ; I remember the time when it was some-
thing strange to charter a vessel for grain in Baltimore — about
ten years ago.

Q. Do you know of houses that started in Baltimore that
had previously been here ? A. Yes, sir ; which opened branch
houses there.

Q. And do a large part of their business in Baltimore ? A.
Certainly ; yes.

Q. And that has been the current during how many years ?
A. Five or six years trade has taken that course, and greatly
improved there.

Q. Has not Philadelphia largely increased ber grain trade
also, as compared with New York? A. Yes, sir; very much
indeed.

Q. Do 3'ou charter vessels from Philadelphia and Balti-
more ? A. I charter vessels from all ports.

Q. From all ports to all ports ? A. Yes, sir.

Q. How is it as to rates for bacon and ham — our export in
meat as compared with the other poi'ts ? A. I should say that
New York is the leading port.

Q. New York is still the leading port in that ? A. Yes, sir ;
New York and Boston ; Boston takes a great deal.

Q. Is that true of ham and bacon, as well as of fresh meats?
A. Ham, bacon, lard — meats in general.

Q. Of animal products? A. Animals I am not posted
about yery much.

667

By Mr. LOOMIS :

Q. What, branches of trade are you posted on? A. The
grain, petroleum, and the general cargo business, which con-
sists of tobacco, and meats, and lard, &c.

Q. How do you derive your information as to the business
of Boston in these products? A. In petroleum, from charters
I see made there, and which I have made myself ; I have
known the time I could not make a charter in Boston for petro-
leum, and I can make now there.

Q. What charters do you see other than those made by
yourself? A. I know every charter that is made every day,
here or in Boston, or in Philadelphia or in Baltimore.

Q. Is there a public record of them ? A. Yes, sir.

Q. You inspect that record ? A. I get that record every
night from the reporters and from the merchants themselves
who charter the vessels.

Q. That is the way you get your information ? A. Yes,
sir.

Q. Did you ever charter a vessel to go from Boston ? A. I
have chartered vessels from Boston ; yes, sir.

Q. Where was the vessel when you chartered her; in Boston
or New York ? A. She was in Boston.

Q. How many did you ever charter? A. I could not say
how many ; I don't remember how many ; I know I have char-
tered vessels which were theie; I have chartered a great many
vessels.

Q. What were they loaded with ? A. I remember that ves-
sels were loaded with bacon and palm oil, and with lard ; I
think with lard ; I have not chartered any petroleum vessels ;
all the petroleum vessels, as I said before, that were charter-
ed in Boston this spring have been chartered on the spot
by brokers there, to New York houses.

By Mr. Shipman :

Q. Where did the petroleum originate that has recently
begun to be shipped from Boston ? A. I don't know ; it may
be Canada, or it may be from Pennsylvania ; we used to ship
Canada petroleum from New York.

668

By Mr. LooMis :

Q. Tour business is limited to the chartering of sailing ves-
sels? A. Yes, sir.

Q. Do you charter more or less from the port of New York
now than you ever did before? A. Our business has
increased, because we have mostly foreign business, and most
of the foreign vessels come to our concern.

Q. You have sent from the Port of New York more
vessels within the past year than you ever did before? A.
Yes, sir.

Q. Been a steady increase in your business, as going from
the port of New York ? A. As far as our business is con-
cerned ; yes, sir.

Q: How long have you been in it? A. About eleven years.

By Mr. Shipman :

Q. In regard to the proportion of grain shipped from New
York port, what proportion is carried in sailing vessels and
what proportion carried in steamers ? A.' I am not posted
on statistics.

Q. How is the cattle trade ; is that live stock steamer trade ?
A. All steamer trade.

Q. Both for live cattle and the cattle that have been
slaughtered? A. Yes, sir ; except the salted meats, which go
by sailing vessels.

By Mr. LoOMis :

Q. Your business is limited to full cargoes ? A. No, part
cargoes as well ; we are engaged in brokerage.

By Mr. Blanchaed :

Q. Have you branch houses in Baltimore, Philadelphia and
Boston? No, sir.

Q. What are your methods of chartering vessels in those
cities? A. Either we charter to people in New York, most of
the merchants live here in New York — most of the petroleum
merchants live here in New York, and the grain merchants we
charter through brokers in Baltimore and Philadelphia,
because the grain people are on the spot there.

669

Q. Did you ever charter at New York for brokers at
Philadelphia and Baltimore ? A. Yes, sir ; sometimes for
petroleum.

Q. So it works both ways, soraetimes ? A. Yes, sir.

Q. Sometimes those houses charter through you, aud some-
times you charter through them ? A. Grain vessels, never.

Q. But petroleum ? A. But mostly all the petroleum mer-
chants and exporters live in New York, or have their offices
here.

Q. Do you know whether any Baltimore or Philadelphia
houses have branches in New York, or not ? A. I don't think
they have.

Q. You don't know ? A. I don't remember at present ;
Peter Wright & Sons have an agency here, but it is only for
the steamer department, not for the export business.

Q. How many ships hare you chartered from Philadelphia
this year? A. I think I have chartered since the 1st of Janu-
ary, about thirty petroleum vessels.

Q. How many for grain ? A. I may have chartered about
ten for grain.

Q. How many from New York ? A. I think we have charter-
ed so far this year about 400 vessels in all ; of course, deduct-
ing the Philadelphia and Baltimore vessels ; we charter at the
rate of 1,000 vessels a year.

Q. Then, out of that 400 you have chartered probably 40 at
Philadelphia ? A. Yes, sir ; I think so.

Q. And .how many at Baltimore ? A. perhaps 25 to 30.

Q. How many at Boston ? A. I have not chartered any at
Boston this year.

Q. Then, out of a total of 400 vessels since the 1st of Janu-
ary, 345 have been chartered from New York ? A. Yes, sir.

Q. That is about the usual proportion, or is it greater this
year ? A. It depends entirely upon circumstances ; sometimes
I charter a great many vessels in Philadelphia and Baltimore;
vessels which 1 control ; if I can pay more attention to that
freight; especially of late, this year, I have not paid so much
attention to the Philadelphia and Baltimore business, because,
in the first place, it don't pay much, and in the second place
because I have too much business on hand here ; if I would pay
closer attention of course I could charter a great many more.

Q. Do I understand you that these vessels of 400 are char-

670

tered from New York in addition to those from the other
places ? A. Of course ; it is only an estimate ; I think I have
chartered from 400 to 500 vessels in all from the first of Janu-
ary, this year ; and 30 or 40 from Philadelphia, and 25 or 30
from Baltimore.

Q. Will you furnish the Committee a statement of the char-
ters your house has made from the 1st of January to the 15th
of June from each one of the ports ? A. With pleasure.

By Mr. Steene :

Q. Include in the same statement also as to former years as
to Philadelphia and Baltimore tessels ? A. I can give you a
statement for the last four years.

Q. Say for the last five years ? A. 1 think I can give it to
you for five years.

By Mr. Bakee :

Q. And also the character of the cargoes and freights ? A.
Yes, sir.

By Mr. J3langha.kd :

Q. Do you ever have any charters which are called " P. T's"
private terms ; is not that a way of chartering vessels ? A.
No ; we sometimes report our vessels " P. T." when wfe don't
want to name the rates which we have obtained ; sometimes
a merchant makes the condition that he don't want the rate to
be named, especially in case of a rising market, and he has a
special object in view not to let people know where the vessel
is going ; in that case we keep it secret, and it is reported " P.

Q. And you don't give the same rates every day to every-
body ? A. As a general rule ; yes, sir.

Q. You have exceptions to it ? A. We give it as a general
rule ; then we say " P. T." in such a case where the merchants
request us to withhold that information for a few days ; then
we report our vessels " closed, P. T."

Q. That is a special rate ? A. It is only in special cases J
not very often.

Q. It is a special rate ? A. No, sir ; it is not a special rate.

671

Q. Do you charter all your vessels ou the same day, to the
same port, at the same price ? A. It is a matter of bargain.

Q. It may or may not be so ? A. Yes, sir.

Q. Then, for the same day, to the same people, you may
charge different rates ? A. Yes, sir ; if the market rises higher.

Q. You get what rates the business bears, do you, taking
the New York and foreign markets? A. Exactly; I suppose
so.

Q. Do you know the quantity of petroleum going to Boston
as compared with New York ? A. As I said before, it has only
commenced this last winter and spring, and I know about ten
or fifteen cargoes having been shipped from Boston since the
1st of January, this year.

Q. Is that Canada oil found in Western Canada? A. I
don't know.

Q. You don't know whether Canadian legislation protects
that oil so as to send it over the Grand Trunk road or not? A.
I don't know.

Q. I understand you that, because of the ice in the Delaware
in the winter, the average rate from Philadelphia on sailing
vessels would lie higher than from New York ? A. Yes, sir ;
in the winter, it is certainly higher.

C^. Does it average higher from January 1st, to December
31st, in each year from Philadelphia than from New York? A.
I thiidi there have been years, yes, when they are higher and
years when they are about the same ; just now the freights are
about the same as in New York.

Q. Then, when grain comes here by canal you put up the
prices by sailing vessels ? A. We don't put it up ; we generally
manage to get higher rates, because there is an increased
demand.

Q. It goes up ? A. It goes up.

Q. You get them if they go up ? A. Try to.

Q. And you charge the higher rate if it goes up ? A. Cer-
tainly ; we charge all we can get.

Q. Please attach to this list of vessels you are going to
furnish your own relative charter rates from Baltimore, Phila-
delphia and New York during all those five years- rates at
which you have chartered these different vessels ? A. Yes, sir.

Q. Are the harbor charges in New York higher than they are
at Baltimore or Philadelphia ? A. Yes, sir.

672

Q. Are tJie port charges higlier outside of the specific harbor
charge ; dock charges ? A. There is no wharfage to be paid
in Baltimore and Philadelphia, which has to be paid here,
which is a great drawback to New York ; there is no elevator
fee in Baltimore and Philadelphia, while there is in New York.
Q. The shipper pajs the charges at those points, and here
the ship pays it ? A. I don't know who paj-s it in Philadelphia
and Baltimore ; in New York the ship pays.

Q. Is it a difference in the system ? A. I don't know why ;
here the vessel has to pay for the elevating, and in Philadel-
phia and Baltimore the vessel don't pay for it.

Q. Aside from that isn't there a specified charge for elevator
service at Philadelphia and Baltimore ? A. I don't think there
is ; there may be for trimming the cargo. *

Q. Then it may be the same charge in another form ? A.
No, sir ; it is not.

Q. Do you know whether the Baltimore & Ohio road
charges one and a quarter cents per bushel for the first ten
days, in addition to its rate for freight ? A. I don't know
about the Baltimore & Ohio.

Q. Do you know vshether the Pennsylvania road charges one
and an eighth cents per bushel in addition to its rates for
freight? A. I don't know anything about it.

Q. Do you know whether the railroads in New York make
any charge whatever ? A. There is one railroad — the New
York Ceotral and Hudson Eiver Railroad, for the last si^ or
even months, has given steamships free elevating, but not sail-
ing vessels.

Q. Do the ships ever allow drawbacks on the charter rates
that they make ? A. No, sir.

Q. Did you ever name a rate and then pay a drawback from
that rate to anybody ? A. No, sir.

Q. But you make it in the form of special rates varying with
diflerent people in the same day — you do it in a different way
— name an open rate ? A. If the maiket should go higher, as
I said before, and vessels get scarcer in the afternoon, I might
charge the same man a higher rate than in the forenoon ; it
depends on circumstances ; as I say, it is a matter of bargain.
Q, Does the charter party ever name a higher rate than the
ship actually receives ? A, No, sir ; uqt our gharter parties
which I have made.

673

Q. Do you know of charter parties that do ? A. No, sir ; [
have not seen a charter party that way.

Q. May it exist without your knowing it? A. I don't think
so, because the rate which is contained in the charter party
will always be claimed by the captain ; the charter party is a
contract between the captain and the merchant, and whatever
rate is in the charter party the captain will claim.

Q. Are the charges of shipping houses like your own the
same at Baltimore and Philadelphia and New York ? A. You
mean the commission for making the charter parties ?

Q. Yes? A. Yes, sir; if we have to divide with a fellow
broker, of course we receive a smaller share ; the rate
is always five per cent, commission, and if we charter through
a fellow broker in Philadelphia or Baltimore, we divide with
him or divide with the captain ; it is a matter of bargain.

Q. Your rate is five per cent. ? A. Yes, sir.

Q. Is the charge the same in Philadelphia and Baltimore ?
A. Yes, sir; but the captain or the owner always gets a return
charge of the commission on foreign vessels.

Q. Does not a charter party often call for a larger rate than
the ship actually gets, and is not the difference paid by the
captain; is it never done ? A. I have seen instances that a
charty party was made at about, we will say, six shillings
per quarter, and the bill of lading at a different rate ; the bill
of lading to be signed without prejudice to his charter party;
any difference between the amount of the freight and the
charter party to be settled before the vessel sails ; I have seen
instances where a bill of lading was billed to the captain at
five and six pence, and his charter party was six shillings, and
he had to sign a difference note for the 6d., of course.

Q. That was a drawback, wasn't it? A. I don't call it a
drawback ; the shipper makes his own bills of lading to suit
his trade, I suppose.

Q. That is a captain's draft? A. It is a captain's draft,
payable on arrival on the other side, which is frequently done.

Q. That is a drawback ? A. I don't call that a drawback.

Q. If you name a charter party charging six pence, and the
bill of lading is five and six pence, there is a difference to
somebody? A. Allow me to explain ; for instance, a mer-
chant charters several vessels to arrive, and he thinks six
shillings a foir rate, and when the vessel arrives here and the
73

674

market is only five and six pence, and he puts only five and
six pence in the bill of lading the captain receives the six
pence here ; if, howevor, the market becomes higher
in such a case, the captain has to give a note for the
difference ; I think this former statement is not quite correct ;
I mean to say that if the bill of lading is presented at a higher
rate the captain has to give a note for the difference ; if it is
presented for a lower rate, the captain gets the difference in
cash.

Q. A charter party may name a different price and the bill
of lading may be higher or lower than that?

Mr. Sterne — That is not it at all; that is a mere settlement
of accounts.

The Witness — That is all that it is.

Q. Is that true? A. It is a settlement of the charter party,
as Mr. Sterne says.

Q. The rates of the charter party may be subject to this
condition of affairs, so that you don't know whether these
captains and others are paying or receiving ? A. No, sir ; that
is not possible.

Q. Suppose Peter Wright & Sons, of Philadelphia, charter
the bark A. B., to Cork, for orders, at six shillings ; what
means have you of knowing that the captain may not have
given his draft for six pence back, and that the rate is fivo
and six pence really? A. If the charter party calls for six
shillings the captain will get his six shillings and he has then
to pay the captaia six pence cash before he sails.

Q. Suppose the bill of lading calls for five and six pence ;
and the charter is a different rate ; at what price from Phila-
delphia would that be reported to you? A. If the bill of
lading calls for five and six pence, and the charter party
calls for six shillings, it would be reported at six shillings.

Q. In giving this list to the Committee, how do you propose
to give it for these rates ; do you propose to give it for six
shillings in that case, or five and six pence, or do you
know anything about the five and six pence — would
you know if this drawback of six pence existed ? A. There
is no drawback.

Q. There is a difference ? A. There is a difference, but it
is very seldom, and only occurs when the merchant has chart-
ered a vessel to arrive on speculation, or has taken the vessel,

675

for instance, at 6s. and he presents his bill of lading at a less
rate to the captain, and pays the captain his difference in cash,
or he presents a higher bill of lading, and lets the captain
sign a difference note.

Q. In these reports, at which one of those rates would that
ship be reported? A. Always be reported at the charter
rate — the actual rate which the ship goes for — carrying the
cargo to the other side.

By the Ohaibman :

Q. The bill of lading determines the cost of transportation ?
A. No, sir.

By Mr. Sterne :

Q. That determines the cost of transportation to the con-
signee? A. The charter party contains the rate which the
ship earns ; that is the contract with the ship ; the bill of lading
may be at quite a different rate from the charter party, but the
rate in the charter party is the actual rate which the vessel
gets for making that voyage.

B3' the Chaibman :

Q. And the actual cost of transportation of the goods to the
party who ships them, or to the consignee, virtually and essen-
tially is determined by the bill of lading? A. I would not say
that, as a man may do as he pleases with the bill of lading ; all
the captain has to look out for, is, that he gets his cargo on
board, and gets his difference between the bill of lading anil
the charter party paid here, if there is a difference in favor
of the ship ; this promissory note for the difference is very
seldom taken in business which is closed on the spot ; only as
I have said before, where vessels are chartered to arrive at I's.
and the market is higher, very often the merchant, who holds
the charter party, recharters that vessel to another merchant
at 6s. 6d., and that merchant makes out his bill of lading at
6s. 6d., and the captain has to sign a difference note for that
6d., which he is not entitled to ; but that is not an eveiy day
occurrence.

By the Chairman :
Q. I understand you to say that when you keep your terms

676

of contract private, you do it not as part of your own policy,
but at the request of tlie private individual with whom you
deal ? A. Yes, sir.

By Mr. Sterne:

Q. You say that there is no charge made in Philadelphia
or Baltimore for elevating grain? A. No, sir.

Q. The elevating is done by the railway companies there,
isn't it ? A. The ship does not pay any elevating expenses.

Q. The railway company does the elevating without charge
to the ship ? A. I don't know whether the railway company
does it.

Q. How is the elevating done ? A. By elevators the same
as here.

Q. Do you know who owns them ? A. I don't who owns
them.

Q. But you get your grain on board free at Baltimore aad
Philadelphia? A. Yes, sir.

Q. What do you pay here ? A. We pay here, I think, $6 ■
per thousand bushels for single decked vessels.

Q. To Whitney & Twombly ? A. I don't know those gentle-
men.

Q. The Sixty-third street elevator, isn't it ? A. It may be ;
as I stated before, the steamships don't pay any elevating
there.

Q. But the sailing vessels do ? A. I think they do, but I
don't know who collects the money.

Q. It is the New York Central elevator, isn't it ? A. I don't
know who the elevator belongs to ; I have no idea.

Q. It is the elevator which elevates all the grain that comes
over the New York Central Railroad, isn't it; isn't that at
Sixty-third street? A. I think so.

Q. And that is the elevator to which you have reference?
A. Yes, sir.

Q. Have you any charter from the State of New York ? A.
No, sir.

Q. Did you ever get any State aid for your business ? A.
No, sir.

Q. Any money from the State to carry on your business ?
A. No, sir.

677

Q. Did yon ever get any County aid for your business ? A.
No, sir.

Q. Did you ever exercise the right of eminent domain in the
City of New York or throughout the State of New York for the
carrying on of your business ? A. No, sir.

Mr. Blanchabd — Or on the sea ? A. No, sir ; I guess not.

Q. You didn't condemn anybody's property in your life and
take it at a valuation that Commissioners may have put upon
it? A. I don't think I did.

Q. For any purposes of your business ? A. No, sir.

By Mr. Shipman :

Q. Who is your senior partner ? A. Mr. C. P. Funch.

Q. Is he absent from the city? A. Yes, sir; he is in Europe.

By Mr. Blanchabd :
Q. Is Mr. Edye in the city ? A. Yes, sir.
Q. What are his initials ? A. H. W. O.

By Mr. Shipman :

Q. Are you a partner in the concern ? A. Yes, sir.

By Mr. LooMis :

Q. When you said just now that grain was put into vessels
at Baltimore and Philadelphia without charge to the vessels,
you omitted the trimming charge, didn't you ? A. I think
there is a charge for trimming.

Q. Do you know how much it amounts to ? A. I do not.

By Mr. Sterne :

Q. Is that an appreciable amount ? A. I don't think it
would be very much.

Q. It does not compare at all with the amount that is
paid for elevating ?

Mr. LooMis — I object to that question when he says he don't
.know.
' The Ohaieman — Perhaps the witness can ascertain.

Q. Find out, please, what the trimming charges to vessels
are? A. I can give you all the details as compared with the
elevating charges.

(Eecess.)

678
R. G. Vilas recalled :

By Mr. Sterne :

Q, Didn't you promise to bring us contracts with the Na-
tional Stockyard Company and the contract with McPherson ?
A. I didn't understand that you requested those ; they are not
in my memorandum.

Q. Among the things that are on that memorandum, what did
you fetch ? A. I haven't been able to get any of the statements
perfected ; I would have had with me apart of them this morn-
ing, but I found a telegram on my desk from Mr. Hepburn,
that hastened me, and I could not wait for them ; they are all
being prepared, but it takes sometime to get some of those
statements ready.

Q. Will you add to your memorandum the contract with
Mr. McPherson ? A. Yes, sir.

The Chairman — Could you get those by to-morrow morn-
ing ? A. Yes ; I tliink I can ; I will get everything I can in
shape ; they are at work on them, and I would have had part
of them ready this morning, but I wanted to go over with
them.

Q. The contract of the National Stockyard Company and
the contract with Mr. McPherson ? A. Of course I have got
to try and get those from other departments ; they are not in
my department.

Q. They are in the hands of Mr. Little, are they not ? A.
Probably with the Secretary ; I will see him, though.

By the Chaibman :

Q. The request of you is just as good as if made to any
other one? 'A. Yes.

By Mr. Sterne :

Q. Has the Erie any freight cars ? A. Yes.

Q. Any that they use for through freights ? A. Yes, sir.

Q. How many freight cars has the New York, Lake Erie
& Western compared with the number that they got from the
Oar Trust Company and the United States Eolling Stock Com-
pany ? A. I don't know ; I don't think we have any from the
United States Eolling Stock Company.

679

Q. What does the United States Rolling Stoct Company
furnish you ? A. I don't know that they furnish us anything.

Q. Do they furnish your passenger cars ? A. Not that I
know of ; I think not.

Q. The Car Trust Company ? A. We have freight equip-
ment under the Car Trust Company.

Q. What proportion of your freight equipment comes from
the Car Trust Company of the whole freight equipment on the
road? A. I should have to refer to the contracts ; I don't re-
member how many the Car Trust Company furnish.

Mr. Blanchard — Do you want those contracts, Mr. Sterne?

Mr. Sterne — Yes, sir.

Mr. Blanchard — You can have them.

Mr. Sterne — We would like to have also the number of cars
compared with the whole number that you have.

The Witness — The Car Tiiist Company contracts, and the
number of cars that are furnished by the Car Trust Company,
as compared with the total equipment ?

Mr. Sterne — Yes, sir.

The Chairman —And the figures that will enable us to make
a comparison ? A. Yes. sir.

By Mr. Sterne :

Q. And whatever other organization there is, that furnishes
either passenger or freight equipment ? A. I have nothing to
do with the passeugei business.

Q. Freight equipment ? A. I don't think there is anything
but the Car Trust Company.

Q. Do yoQ understand that the whole freight equipment that
belonged to the Erie Railway Company, passed into the hands
of the new organization ? A. Yes, sir.

Q. Do you have any charge of the coal traffic on your road ?
A. Not of the making of the rates.

Q. Who does that ? A. Mr. E. N. Frisbie ; he is our general
coal agent.

Q. Who owns the coal cars, do you know ? A. We own
some of them.

Q. And the great majority of them are owned by who ? A.
I could not say.

Q. Is that part of the Car Trust Company's delivery ? A. I
could not tell that ; I do not know ; I will furnish you exactly

680

with what the Car Trust Company furnishes, with the different
styles of cars.

Q. Who has charge now of these outside organization ; I am
askiug Mr. Vilas, but I wish you, Mr. Blanchard, would give
the answer, if Mr. Vilas does not know ; your coal organiza-
tion ?

Mr. Blanohabd — Mr. E. M. Clymer is the President of our
coal organization.

Mr. Stekne — He has taken the place of Mr. Sherman.

Mr. Bl.^nghaed — No ; he always was President.

Q. We subpcenaed a number of fast freight agents here, and
you stated to me that you could give me all the information
that they could give ? A. Yes, sir.

Q. Will you kindly tell me whether you don't make now
special rates on westbound traffic ? A. Through traffic V

Q. Through traffic ? A. No, sir ; we do not.

Q. In no instance? A. No, sir.

Q. Haven't made for two years f)ast ? A. I don't know
about that ; I think there may have been.

Q. Tell me whether there have been — I have excused those
gentlemen on the condition of your giving me the information;
if you do not give it to me I will have them brought here
again ? A. I can give you any information you want.

Q. Have you given special rates on westbound traffic since
the pooling arrangements have been concluded ? A. I should
have to refer to the office to look.

Q. Haven't they given special rates, these various fast
freight line agents, and you confirmed them subsequently ? A.
No, sir.

Q. Had they in every instance special authoritj' from you ?
A. There might have been a few cases of this kind.

Q. I don't want cases ? A. I am going to tell you the situ-
ation.

Q. If you would tell me actual cases I will take them ? A.
I can not tell you actual cases and actual names ; I was only
going to state for the benefit of the Committee the situation ;
I suppose they wanted to know that ; the situation has been
that at times during the past two years, or since the pool
went into effect, that some of the western roads have given the
authority to these contracting agents that you refer to to make
special rates without reference to the trunk lines, and without
reference to our road, but when such authority is given by a

681

western road it lias to be paid, and is paid witli the under-
standing that the rebate is to be paid west of the trunk lines.

By the Chairman :

Q. What do you mean by " trunk lines ?" A.- The four
tiunk lines, the New York Central, the Erie, the Pennsylvania,
and the Baltimore & Ohio.

Q. To their western terminal station ? A. Yes, sir.

Q. Simply in this State, or their respective States ? A.
Yes, sir.

Q. You don't include the Lake Shore ? A. No, sir ; none of
the western connections ; just the four lines ; there have been
times during the past two years vrhen the western roads have
not been working in perfect harmony with each other, and
they have given instructions to these fast line agents them-
selves, without reference to the ofl&cer of the Erie Company,
and those fast freight lines would make a special rate author-
ized by them to be paid west of the trunk lines ; I would like
to say right here that these agents, almost all of them, are paid
their salaries, and their rents, and their expenses by the
western roads.

Q. Y/hen they make those special rates lower than the
established rates, does it effect the amount which your road
receives ? A. Not at all.

Q. The reduction is made wholly on the western roads ? A.
Wholly, and the rebate is paid by the roads west of us ; we
will take our Great Western Despatch, for instance, our largest
line, which is the consolidation of three of our fast freight
lines, the Great Western Despatch, the South Shore, and the
Erie and Pacific Despatch — for instance, the Lake Shore,
might say to a contracting agent of the Great Western De-
spatch, you may pay a drawback of five cents on a hundred
pounds to Chicago and St. Louis ; we will take care of that
drawback west of Buffalo ; that agent without saying anything
to me, would go to a shipper, perhaps, and make him that
drawback, and the Lake Shore would pay it, and we would
never know anything about it.

By Mr. Steene :

Q. Are you prepared to swear that no voucher has passed
through your office, for the last two years, to any of the

682

agents of the fast freight Hnes, or to any of the agents of
the fast freight lines in 'any capacity, repaying drawbacks
on western bound through freights? A. I would have to
look at the office to see.

Q. You ^are not prepared to say that now ; the Committee
want that information? A. I can give you that.

Q. On eastbouud traffic, the condition is about as bad as it
ever has been, isn't it, as to special rates ? A. No, sir; I think
not

Q. Since when is that change ; within the last few weeks ?
A. Since the 9th of this month.

Q. Down to, the 9th, any rate was made ? A. For a short
time previous to the 9th. ^

Q. Any rate was a rate ? A. Most any rate.

Q. Almost all the rates were special ? A. Yes, sir ; they
were special -in one respect ; they w^ere open rates to every-
body.

Q. They were open rates to those who called for them ? A.
To anybody who shipped.

Q. Were there no schedule rates at all ? A. No, sir ;
they were iguored eatirely.

Q. Ignored to everybody, without any special rate being
named; you don't mean that, do you? A. Well, practically,
yes, T do mean that.

Q. Do you mean to say you did not carry a pound of freight
from western points at schedule rates prior to the 9th of this
month? A. Not for some time previous.

Q. For how long previous ? A. I don't know exactly how
long ; for several weeks.

Q. Is it true that schedule rates were maintained for those
who did not get special rates, and sjpecial rates were made to
those who asked for them ? A. Not for several weeks prior to
the 9th.

Q. Then, prior to several weeks previous to the 9th, that -
was the condition, wasn't it? A. Yes, sir.

Q. Such as I have described ? A. Except that there was
not a great number of special rates prior to the general break.

Q. But there were constant breaks, weren't there ; the
agreed schedule rates were not maintained ? A. There might
have been some special rates ; I shall have to refer to the
record.

Q. Have you a set of books corresponding to the books

♦^83

brought here by the New York Central Railroad, in which the
special through rates are fixed; eastbounl rates? A. We
keep no record of them whatever.

Q. Have you any record of drawbacks paid from scheduled
rates ? A. They are m the hands of our fast freight lines.

Q. Then the iniormation that we wanted from the fast freight
line agents you can not furnish in any event'? A. Yes,
sir ; I can furuish you everything you want ; every fast freight
line agent is under my orders and will furnish me anything
that I ask for ; they would not give them to you without my
orders, in all probability.

Q. Even if the Chairman of the Committee asked for them ?
A. They would come to me firsi, even if they sent for them,
the same as I go to our President ; I go to our President
every time ; I would not take a document out of our office and
bring it here until our President gave me authority.

Q. We want the information ? A. I will give you anything
you want.

Q. As to the variation in rates within the past two years on
eastbound freights — the average rate ? A. I can not give you
the average rate, no one else can, unless you examine every
voucher that has been paid for two years.

Q. You say rates vary so largely that there is no average,
and so frequent ? A. You can get at an average, if you in-
vestigate every voucher that was paid ; I don't want to under-
take to do that.

Q. Do you mean that there was such uncertainty of rates
for the last two years on the eastbound traffic, that you can't
tell the average ? A. I could not tell without examining all
the vouchers that have been paid, and the amount of freight
that had^been shipped under the special rate, and under the
tariff rates ; I don't think it would be possible at all.

Q. Does that arise from the fact that the variation has been
so great? A. No, sir.

Q. What then ? A. They might have been s-o small, we
would have to go through the same sort of examination.

Q. For instance, if the rate varied within 5 per cent., you
could give the average within 5 per cent. ? A. Yes, sir ; but
if there had not been but one special rate paid within the two
years, I would have to examine the special report to find that
out, the whole tonnage, and all about it.

684

Q. Could not you give me an approximate average rate of
eastbound freight ? A. Yes, sir.

Q. Both, under schedule and by special rates? A. Yes,
sir.

Q. You can get that from the books of the fast freight lines ?
A. Yes, sir ; you want from Chicago to New York ?

Q. Yes, any western point ; take Chicago, and give us the ex-
treme fluctuation and how long that lasted; that is, for instance,
if ten cents per hundred was the lowest point touched, let us
have it, and how long it lasted during two years? A. I can't
give you this information to morrow or anything else ; it would
take some time ; you want to arrive at what the different rates
were from Chicago to New York for the past two years, and
how long they lasted, and what was the tariff rates, and the
average special rates.

Q. Yes ; if I understand it aright, there were agreed rates
from Chicago to New York between the four trunk lines? A.
They don't make the rates from Chicago to New York.

Q. There were agreed rates which were schedule rates, and
supposed to exist and continue till a new agreement was
made ? A. Yes, sir.

Q. They were not maintained ? A. At times they were not.

Q. They were scarcely made before they were broken by
somebody, and then came a general war, but they were sup-
posed to exist until new rates were made ? A. Yes, sir.

Q. Now, therefore, the agreed schedule rates during the two
years we want ? A. Yes, sir.

Q. And the cut rates during those two years ; that is all,
Mr. Vilas ?

The Chairman — Have we any book from the Erie road,
showing an entry made corresponding to those ?

Mr. Sterne — No ; we have not ; they are all in the hands
of the fast freight lines.

The Chairman — This information that you are asking Mr.
Vilas will cover that ground ?

Mr. Sterne— No.

The Witness — Well, you asked me for the westbound
freights.

Mr. Sterne — I did ask how much had been paid by way of
rebate, by your company within the past two years.

685

The Witness — You asted me if there had been any variations
made by our road in westbound traffic during the past two
jcars, to let you liave that.

Q. Now, you promised to bring to us a voucher corre-
sponding with the voucher I read to you ? A. I have given you
that.

Q. Will you give us copies of the monthly vouchers repre-
senting the amount of rebates ? A. Yes, sir ; I can make you
a statement from my office of just what we have paid to these
fast freight lines for drawbacks and overcharges.

Q. On eastbound freight ? A. I might not be able to get
that from my office ; I can get it for you ; you want east-
bound ?

Q. Also the amount of rebates that you paid to the Standard
Oil Company ? A. I have got a memorandum of that.

Q. And also the cattle eveners ? A. Yes ; that is being made
now.

Q. C/in you give us the same information that we have from
New York Central as to the individuals to whom these re-
bates were paid ? A. We can by getting at the fast freight
lines.

Q. We only want it on the larger grain shipments, and larger
live stock shipments ; and, for instance, whatever rebates you
gave David Dows & Company, and Bingham Brothers ? A. I
can give you a list.

Q. We wanted these larger houses, and we wanted some
basis of comparison that corresponded with the smaller
houses ? A. Those vouchers are all paid through the fast
freight lines ; we simply pay our portion of them.

Q. You pay one big check to them, and they distribute it?
A. Yes, sir.

Q. The Committee haven't any concealment as to what is
wanted ; it is to give us the information by which we can
determine how much the drawback was, and what difference
there was in the drawbacks to different houses in the same
period of time ? A. Well, I can make out a list of any number
of names, probably.

Q, Well, make it out then, say for the 'month of December,
1878, on eastbound freight, and for the month of July, 1878, on
eastbound freight, the comparison between the different
houses who received the shipments, and the different amounts

GSR

of the drawbacks ? A. Suppose I make you a list of the en-
tire for those two montbs — of all the drawbacks we paid to
everybody ; the name of the party and what it was on, and the
amount ?

Q. That will do ? A. I will do that.

Q. Over all your fast freight lines. A. Yes.

Mr. Shipman— Over all the fast freight lines that have their
offices here.

A. I can get that.

By Mr. Blanchabd :

Q. You have testified that some western lines authorize those
agents of those fast freight lints to pay drawbacks in which
the trunk lines don't participate ? A. Tes, sir.

Q. Do you now know how many agents are appointed —
located in New York — -to act, not only for New York, but
Baltimore, Philadelphia, Boston and elsewhere, for western
roads, paid by western roads, ac ing independent of the author-
ity of the trunk lines, and declinin'j; to be guided or bound by
tlieir action ? A. I don't know just how many ; there are a
great many of them.

Q. How many do you think there are? A. "Well, I don't
know.

Q. Will you please furnish the Committee a list of the agents
located at New York for western roads — freight agents, who
are not responsible to the control of any trunk lines ? A. Yes,
sir.

David Biri'jhani, being duly sworn, testifies as follows :
By Mr. Stebne :

Q. You are a member of the firm of Bingham Brothers ? A.
Yes, sir.

Q. Have you brought with you your rebate account — draw-
back account ? A. We do not receive either rebates or draw-
backs ; have no account of them ; we ship nothing except on
special contracts.

Q. You have no overcharges paid you ? A. Sometimes
freight comes in overcharged, and we send a bill for the dif-
ference, which is settled along with the freight.

G87

Q. You mean to say that is a legitimate claim on your part
for (ivt'iclicirge made for over weighing? A. From putting too
much freight on the bill of lading ; once in a while a man will
send .-Uong a bill of lading and say there is twenty cents
chaiged in this bill of hiding when we should only pay fifteen ;
tlie I aihoad comes to us and says, " you will have to pay us
twi'uty cents and send in a claim for five ;" we send in a claim
for five, but do not keep any record of it, and it only occurs in
rare instances.

Q. So you only send by special contract ? A. That is alL
Q. You are large shippers of grain in this port, are you not ?
A. Yes, sir.
Q. Also at Baltimore ? A. Yes, sir.

Q. Also at Philadelphia ? A. Yes, and Boston and Montreal
Q. You ship at all the five ports '? A. Yes.
Q. In every instance when you ship from the west, do you
make a special contract? A. Always.

Q. You never confine yourself to schedule rates? A. We
know nothing of them ; I never saw a schedule rate; I know
nothing about that.

Q. How long have you been in business ? A.. Twenty years,
more or less.

Q. And during those twenty years you have never known .
anything of schedule rates ? A. I have been in this country
since 1866, and have never known anything of schedule rates,
and never saw a schedule rate — never saw what you call a
schedule rate.

Q. They were never exhibited to you ? A. No, sir.
Q. Do you make your contracts here ? A. Sometimes here
and sometimes west.

Q. When you make them here, with whom do you make
them ? A. With Mr. Mcllhenny, for the New York Central ;
Mr. Yilas, or some one in his ofiice, for the Erie ; and Mr.
Sere, for the Pennsylvania.

Q. When you make it with Mr. Mcllhenny, don't you do it
simply for shipments to Europe, or do you make them with
Mr. Mcllhenny for your goods that you break bulk here ?
A. We make it always on the basis of the inland freight; re-
cently, up to a certain time, we made our contracts mostly to
go through to Europe, and the contracts read now that way,
but we have the option of breaking the bulk here, and, in-

688

stead of sending the , goods to Liverpool necessarily, we can
send them to London or to Cork in the market.

Q. To Cork for orders ? A. Yes.

Q. And you have the option of keeping them here if you
like ■? A. No, sir.

Q. Haven't you the option also upon the especial contract
with the New York Central, or with Mr. Mclllienny, of hav-
ing your goods go to Albany, and go from Albany either to
Boston or New York, as you see fit ? A. No, sir.

Q. Nothing hke that ? A. We had at one time an opportu-
nity of bringing stuff here instead of going to Boston, but we
have no such arrangement ija our contract ; I think we never
made but one contract of that kind, and that was stuff that
was going to Boston ; we got the option of bringing it to New
York — and brought it to New York.

Q. Are the rates the same to Boston as to New York ? A.
Yes.

Q. The same to Philadelphia ami Baltimore? A. No; we
can do a little better at Philadelphia — about one or two cents a
hundred better — two to three cents better.

Q. How about Baltimore? A. We can't make contracts in
Baltimore ; they reserve them for special friends down there.

Q. You can't make contracts down there ? A. Not very
readily at Baltimore ; we can at Philadelphia.

Q. You usually ship by sailing vessels ? A. Yes, sir, and
steamers.

Q. The elevating is charged to you here when you do it by
sailing vessels, isn't it ? A. No.

Q. Have yon a contract upon that point with the Central ?
A. No, sir ; anybody in New York can ship on the same terms
we do, and do.

Q. How do you know that ? A. I know that ; that is an
open rate ; I tell everybody that asks the question what they
can ship by the New York Central for.

Q. Do you know whether they get the same rate ? A. Rate
through ?

Q. Yes ? A. I know some of them do.

Q. You get the option of breaking bulk here if you like ?
A, Yes ; that is for shipment.

Q. And do yon think everybody else has that option ? A. I
think so ; yes, if they ship any quantity.

689

Q. You mean as big a quantity as you ? A. Yes, sir.

Q. The man that ships but a quarter of the (Quantity you
don't think would got it, do you ? A. No ; I think not ; it
would be ridiculous to give it to him.

Q. I don't want a discussiou — I want the facts? A. 1 don't
know.

Q. Does not that give yoa a choice of market ? A. Yes,
sir.

Q. You get the through rate with an option to break bulk
here ? A. Yes ; always providing that it is exported.

Q. Exported to some market ? A. Somewhere ; yes, we get
the same in the other ports, if you want to know that.

Q. Always by special contract? A. Yes.

Q. Every special shipment you make you make a special
contract for ? A. Yes.

Q. And your rates vary each time that you make a ship-
ment? A. Yes.

Q. Have you f oiind any change within recent time ? A. Yes ;
been going all to pieces lately ; they went all to pieces up
until about the 5th of June.

Q. What do you mean by that — that they went all to
pieces ? A. They went from twenty cents down to ten.

Q. Did you not get your special contracts at ten ? A. Yes.

Q. Had you some contracts running at twenty ? A, Y'^es ; I
believe we had ; I am not certain about that.

Q. All your contracts give you the through ratb with
option to break bulk ? A. Yes ; I believe they do.

By Mr. Blanohard :

Q. Did you ever make a contract with Mr. Vilas ? A. I
think I have ; I am not sure ; we shipped very little over the
Erie road ; we found it very hard to make contracts with Mr.
Vilas.

Q. When you speak of always having specific rates, do you
mean from the western point to Liverpool or New York ? A.
To New York.

Q. To New York always? A. Yes, sometimes to England,

Q. When you make the special rate may that rate be the
tariff rate, as far as you know ? A. As far as I know, it may
and sometimes is.
75

690

Q. It is not always below the tariff? A. I do not know
what the tariff is ; I do not pay any attention to it.

Q. Then you use the term special rate simply in the sense
that you want to a fixed contract for the price? A. Yes, I
offer a certain quantity of goods to a railroad and ask them
■what they will carry them for aud they say at such a price ;
I send a note to the railway company saying that we have
made that contract, and that is the end of it, except to ship
the goods ; we ship thetn at rates sometimes higher and some-
times lower ; lately, it has always been lower.

By Mr. Sterne :

Q. When you break bulk here and do not export, how do you
fix the rates with the railroad company ? A. We do not do
that.

Q. Never in any instance ? A. No, sir ; not lately ; we may
have done some in times past, but it is a special understand-
ing with Mr. Mullhanney, that our goods shall not break bulk
here — that is, not be sold in this market.

Q. When you have a through contract and a through rate to
Liverpool, and you do break bulk here or you have broken
bulk here, how was that rate then fixed? A. Well, our rate to
Liverpool is any rate which the railroad company chooses to
put on the bills of lading; our contract is made for the inland
rate ; for instance, when we made the ten cent rate, we told Mr.
Mcllhenny that we would pay him ten cents to New York and
he might fill in his bills of lading at any price he had a mind
to ; but when that stuff came to New York, we would pay him
ten cents a hundred on it, and we did that.

By the Chaieman :

Q. When you say " bill of lading " you mean a bill of lad-
ing from this port? A. No, from the west.

Q. That is a way bill, is it not ? A. I do not know what
you call it.

By Mr. Stebne :

"Q. The way bill would represent a different rate from what
you have a contract for ? A. 1 do not know whether you call it
a way bill or not ; it represents a rate from the west to Liver-

691

pool ; our contract is from the west to New York ; or we make
,it sometimes in another way; Mr. Mcllhanney will inform us
that he is paying sis pence from here to Liverpool for grain .
now, we say we will take some stuff from Chicago on that basis
but we may not want to ship it to Liverpool ; Liverpool may
be overdone when it gets here ; we will make a contract to
supply you with the freight at six pence, and then we can ship
the stuff where we have a mind to ; now, six pence is 21 cents
a hundred; we will say the rate from Chicago will bs 31 ; so
when the staff comes here if the Liverpool market is de-
pressed we will divert it to London or divert it to Cork for
orders ; and it serves another very important purpose ; the
railroad companies, some of them at least, have been in the
habit when they get goods here, of shipping them by all sorts
of old steamers ; by making it in this way, we are able to con-
trol the matter and say what steamers our stuff shall go on ;
we do not want our stuff put aboard vessels that are going to
leak.

By the Chaieman :

Q. So then your bills of lading are dated from Chicago right
through ? A. Yes.

By Mr. Sterne :

Q. You get the option to supply the freight and send your
own grain and break bulk whatever way you choose '? A. Yes.

Q. That option you get in your contract ? A. Yes.

Q. Now, you have not answered my question ; when you
actually break bulk here for use here, how do you settle with
the railroad company your through freight contract?. A. I
will start by saying 1 do not believe we have done that in
three years to the extent of 20,000 bushels, but when we have
done that, we have simply paid them the agreed rate on our

stuff.

Q. You paid them the proportion of the through rate to New
York ? A. Yes, whatever we agreed upon the only bargain
we make for the rate is from Chicago to New York ; they may
make the ocean rate what they have a mind to, and fill in
the bill of lading what they have a mind to ; we have nothing
to do with that ; we do not care what they fill in the bills of

692

lading at ; if we get the goods here, we pay them what the in-
land rate is.

Q. What possible object is there in getting a through bill ?
A. Well, the object in getting a through bill is to preserve the
identity of our grain.

Q. How do you do that? A. Because we have got grain
represented by that bill of lading which it requires them to
deliver to us.

Q. Would not they be equally required to deliver it at Liv-
erpool on the through bill ? A. Yes.

Q. You have not explained what is the object of getting
your through rate when, you mean to break bulk at any event
in New York and ship them whatever way you like ? A. You
mean the object of having the bills of lading filled in at the
through rate?

Q. Yes. A. That is to prevent the western men from
knowing what we pay.

Q. Then the object is secrecy ? A. Yes.

Q. And you intend to maintain that secrecy between your-
self and the railroad ? A. Yes, certainly.

Q. What possible object is there in secrecy ? A. Well, we
do not generally post our business policy and let everybody
read it.

Q. It is an open rate in any event ; you cannot well keep it
secret ? A. We always keep our business quiet, anyhow ; that
is one of our principles.

Q. You would consider it a breach of faith on the part of
the railroad company to post your rate ? A. No ; if it is to
their interest to post it the>' can do so.

Q. You do not consider it to your interest to post it ? A.
Certainly not.

Q. And you do not mean if you can help it, to let your
neighbors know at what rate you are doing your business ? A.
That is exactly so.

By. Mr. LooMis :

Q. Do I understand that the grain which you receive from
the west with the option to send to any foreign port from New
York, you have the right to dispose of here in New York? A.
No, we do not dispose of it here ; that is, if it is a questioQ of

693

life and death we would, but the understanding is that we do
not sell it here.

Q. The understanding is that the grain which comes from
the west to you, with the option to ship to foreign ports, must
go to some foreign port ? A. Yes, sir.

Q. That has been the practice so far as your business is con-
cerned ? A. Yes.

Q. Then you could not, without violating the agreement, stop
your grain and sell it in New York ?

By Mr. Sterne :

Q. Is that contract in writing ? A. Yes, it is.

Q. Will you produce one of those contracts? A. Yes, sir.

Q. Are they alike? A. No ; I write a letter briefly cover-
ing the points.

Q. Have you got copies of those letters ? A. Yes ; I have
got them in my office.

Q. And you have copies of the responses that you got from
Mr. Eutter? A. We do not get any response except the
letter.

Q. Will you furnish the Committee a copy of that letter ?
A. I will tell you what is in the letter.

Q. State what is in it? A. We have this day engaged from
you for transportation from Chicago to New York, so many
bushels of grain at so much — ten cents per hundred pounds ;
that is all that is in it ; sometimes will add bill of lading may-
be filled in at such and such rate, to Liverpool ; I would have
brought that if I had thought, you wanted it.

Q. Does not the through rate to Liverpool give a lower land
carriage than the land carriage alone ? A. I do not under-
stand the question.

Q. A through rate from Chicago to Liverpool ? A. Will you
excuse me until I get one of my books ?

Q. Is not ordinarily the through rate from Chicago to Liver-
pool less than the rate from Chicago to New York, plus the
ocean rates from New York to Liverpool ? A. No ; it is gen-
erally, I think, a little more.

Q. And you make those through contracts only when it is
a little less ; is that it ? A. We have not made a through
contract in about three months, I think ; we always make con-
tracts when they are less ; that is what we are in business for.

694

Q. In what way can the railroad company prevent you from
selling that grain here in New York after you have broken
bulk hei'e ? A. They cannot prevent us, nor any other man.

Q. And there is nothing in your contract which says you
will not do it? A. No ; but the railroad company know very
well that we will not do it.

Q. That, joxi think, is understood between you and the rail-
road company without its being in the contract ? A. Yes ; our
word is considered pretty good in this market ; well, we never
do it anyhow.

By Mr. LooMis :

Q. As far as you know, other parties have th.e right of re
ceiving grain at the port of New York under the same condi-
tions that you have ? A. Oh, yes ; I know that, because we
buy a great deal of it in that way.

Q. Your business not only consists of buying grain at the
west, for shipment to foreign ports, but you also buy a large
amount of grain here, in tlie New York market ? A. Yes,
probably the largest buyers in the New York market.

Q. At which of, the cities which you have named do you do
the most business ? A. New York.

Q. And has that been so during the time you have been in
business? A. Well, it fluctuates — for a time we did more in
Boston ; we did more in Baltimore until the New York Central
Eaihoad got its elevators built ; that has great'y added to our
business in New Y.rk.

Q. Then at the j.reseijt time — ^say for the last year or two —
the business of New York has increased in that respect as far
as you have contributed to it ? A. No ; in the last three
months.

Q. You do not understand tliat Mr. Mcllhanney ever has
made any payments in regard to shipments ? A. In what
respect?

By Mr. Steene :

Q. Drnwbacks — overcharges? A. No, sir; except a clerical
error, I do not believe we ever collected anything from him
except there might be an error in furnishing a bill.

695

By Mr. Loomis :

Q. I think you stated in your direct evidence that Mr. Mc-
Ilhanney paid the ship something ? A. I said nothing of the
kind, sir.

By Mr. Eutter :

Q. You told Mr. Sterne that Mr. Mcllhanney told you what
he iiiiid to the ship was a six pence ; now do you know that
Mr. Mcllhanney ever did pay any thing to the ship ? A. I did
not make that statement.

Q. You stated that Mr. Mclllianney told you what he paid
to the ship ? A. No ; he charges the ship something.

By Mr. Stebne :

Q. You say you do not pay anything for elevating the sail-
ing vessels in New York harbor ? A. No ; nor anybody else.

Q. Speak for yourself ? A. Well, I do not pay anything;
the ship pays.

Q. Do you pay anything for elevating at Philadelphia or
Baltimore ? A. Ye& ; the charge in Baltimore is | of a cent—
that is, the part that we pay of it ; the real charge I think, is
three quarters ; it costs us about a cent a bushel, I think — in
Phdadelphia I know it cost a cent and a quarter, to pass
grain through the elevator on board ship ; in Baltimore it costs
about the same.

Q. On sailing vessels as well as steamers ; the same thing ?
A. Yes, sir.

By the Chairman :

Q. Is there any corresponding expense in New York ? A.
No, sir.

Q. In transferring of grain from the railroad to the vessels ?
A. There is not.

Q. There is that difference then in transporting grain from
Chicago to Liverpool by way of New York, and from other
ports in favor of the port of New York ? A. There is that
difference in transporting it where our vessels go to the
elevator for it ; where the steamers cannot go to the elevator,
owing to their inability to stand without ballast, it has to be
sent them and it is not saved ; but where we send vessels to

696

tlie elevator we save that charge at New York ; that has only
been within three mouths ; since they got a new elevator built.
Q. Then in that instance there is that saviag in favor of the
port of New York ? A. Yes.

Mr. Sterne — I do not think he means that ; the ship pays
here, does it not ?

The "Witness — I do not know what the proportions are ; the
ship pays at all ports ; the ships pay everywhere ; the old
theory about the ship was that we should deliver our goods on
her string piece, and she put them on board, and when eleva-
tors were introduced at every point they charged something to
put the grain right down in her hold and trim it; there is a
charge of that kind made at the New York Central Elevator,
which the ship pays ; the same charge is made in Baltimore,
Philadelphia, and Montreal.

By the Chairman :

Q. Is this charge in Philadelphia and Baltimore in addition
to the uniform charge ? A.. Yes, sir ; that we pay ourselves.

By Mr. Sterne :

Q. Do you mean to say that in Philadelphia there is a
charge for elevating that doss not exist in New York ? A.
Yes.

Q. To everybody ? A. Yes.

Q. Do you know Mr. Volckens ? A. Yes.

Q, He is a large charterer, isn't he ? A. Yes.

Q. Well, he told us here to-day that he is compelled to pay
for elevating to the New York Central Eailroad for sailing ves-
sels here, and he gets it free on board in Philadelphia and
Baltimore. A. I don't think that is quite so ; the charge is
not quite as much to the ships down there as it is in New
York, but they charge them something ; we have nothing to
do with what the ships pay ; that is included in our freight ; I
am speaking now of what we pay.

Q. That is precisely what I want to clear up before the
Committee ; that is to say, the difference is a difference in
system, here you are relieved from the payment and it is im-
posed upon the ship, and there the ship is relieved from it and
it is imposed upon you ? A. That is not strictly so, because

697

the amounts are not the same ; the amount that is charged the
ship is smaller ; it is, I behove, ()| dollars per thousand bushels.

Q. As compared with tliat what is it here ? A. That is
what is charged here.

Q. How much is it in Philadelphia ? A. I think it is about
a dollar and a half or two dollars.

Q. There is a difference of four dollars in favor of Philadel-
phia? A. I think something like that; it amounts, I think,
to about a half cent a bushel.

Q. How is it in Baltimore ? A. I think it is about the same
in Baltimore.

Q. That is a difference in favor of Baltimore ? A. Yes.

Q. In other words, they charge simply a trimming charge
there and here they charge an elevating charge ? A. That
is it.

Q. You have stated that other parties get the same option
that you get ; who are the other parties that get it — David
Dows? A. Yes.

Q. Whoelse— Hickcox&Co.? A. Yes,'

Q. Jesse Hoyt & Company ? A. Yes.

Q. Armour, Plankington & Company ? A. Yes.

Q. Anybody else ? A. Franklin Edson & Company.

Q. Anybody else ? A. Everybody ; take the names on
change, every one of them gets the same thing.

Q. Get the same option ? A. Certainly ; everybody knows
there is no charge at the New York Central elevator when they
send a ship there.

Q. No ; I mean the option that you get of breaking bulk here
with the personal understanding that you will not sell here on
your through bills ? A. I will withdraw all that ; there are
none of those gentlemen ship abroad ; they ship on local rates;
they get the option of terminating the contract here, and selling
the stuff to go where they have a mind to.

Q. I am speaking of that special option that you get of
breaking bulk here on your through contracts ; do you know
anybody else but yourself who gets that ? A. No ; I don't
know of anybody else.

By Mr. Looms :

Q. In loading a ship with grain from the elevator there are
two prices, as I understand — to place the vessel alongside the
76

698

elevator, and one price is tofniove tbe ginin into the hold of
the vessel ? A. Yes.

Q. That is called " elevation ?" A. Yes.

Q. The other price is for placing the graiu in the hold of the
■ vessel, and that is called " trimming ?" A. Yes.

Q. Now, is there any charge, as you understaud, at the New
York Central elevator for taking the grain from the elevator-
and dumping it into the hold of the vessel ? A. I understand
not.

Q. The charge is for trimming the vessel, isn't it? A. Yes ;
that is what they call it.

Q. And charge for elevation is made at Philadelphia and
Baltimore ? A. To the owners of the grain; yes.

Q. So New York is favored in that respect over those places?
A. Yes.

By Mr. Sterne :

Q. On the whole rate, is New York favoi'ed, compared with
Philadelphia and Baltimore ? A. Yes ; if it don't get the
Philadelphia and Baltimore people stirred up we can beat
them.

Q. You get a good deal more business through Baltimore
than you did before ? A. No ; we are doing less now since the
Central got its elevator.

Q. You did a good deal more business before the Central
got this elevator, didn't you, each vear in Baltimore ? A.
Yes.

Q. How is it about Philadelphia ; didn't you do more and
more each year in Philadelphia ? A. Yes ; up to the present
we did.

Q. Didn't you do more and more in Boston each year ? A.
Yes.

Q. And do still ? A. No ; we stopped sending to Boston
about three months ago ; we much pi'efer New York if we can
get the grain here ; until the railroad had the elevator built
we could do nothing with it.

Q. You still do business in Baltimore and Philadelphia,
though, do you not? A. Oh, yes; not so much, though.

By. Mr. Blanchaed :

Q. Wni you please explain to the Committee what these

699

options actually are that Mr. Sterne thinks you have here in
New Yorli ; I don't think that is clear to anybody in the room ;
please state what option you have here? A. Well, will you
allow me to tell it in my own way ?

Q. Certainly ; we want you to ? A. Some time ago the
members of the grain trade in New York determined to have
all grain arriving here graded, and the railroad companies
entered into an agreement that all their grain wliich came to
this port should be graded ; and that didn't suit us at all, be-
cause it simply wipes out any judgment we have in the
careful selection of our property, and we said : " We will not
have our grain graded " ; and we therefore take a bill of lading
for that grain through from Chicago to Liverpool, and by that
means the raidroad company is compelled to preserve the
identity of our grain, which under the ordinary bill of ladiug
they could not do.

By the Chairman :

Q. They simply give you your grain? A. They give me my
own grain, which I want ; if it were not for that I would just
as soon have the grain come on the local rate ; but we pre-
serve the identity of our stuffs, and if we have any careful judg-
ment in buying that we reap the benefit of it ; that is our only
object in taking a through blU of lading instead of a local one.

By Mr. Blanchard :

Q. It is simply an option of preserving the identity ? A.
That is all.

Q. Now, if grain is shipped by your house at Chicago, or
your agency at Chicago, to a concern at Liverpool, have you
the right to stop that grain here in New York and sell it to
David Dows & Co., or anybody else ? A. No ; we have never
.written any agreement about it, but it is understood that we do
not do that, and we never do it.

Q. Suppose you did it ; how would you get possession of the
grain if the bill of lading was given from Chicago to Liverpool?
A. We hand the bill of lading to Mr. Mc Ilhanney, and tell him
to send us his bill ; he always does it ; that is the way we do ;
we take the bill of lading from Chicago to Liverpool and we

700

hand it in to the New York office, and say " make the bill out
for your local freight and we will pay it."

Q. Has everybody else the same option ? A. I think so.

Q. Do you know any other firms that have the same option ?
A. I think every other firm has the same option.

Q. There is no discrimination in that respect ? A. Not that
I know of.

Q. You spoke in your direct testimony of the Baltimore &
Ohio taking care of their special friends at Baltimore ; what
do you mean by that ? A. There is an impression abroad that
there are certain houses that get special rates at Baltimore
that the general public cannot get.

Q. In other words, they protect the interests of the citizens
of Baltimore and do not work for yours ; is that it ? A. That
is very likely.

Q. I understand you to say you have five houses — Phila-
delphia, Baltimore, New York, Boston and Montreal? A. No.

Q. Five branches of the same house for those five Cities ?
A. No.

Q. You do business with those Cities ? A. "We do business
there through agents.

Q. You are the largest buyers of grain in New York ? A. I
think probably.

By Mr. Stebnb :

Q. Do you buy flour ? A. No ; we do not buy flour.

By Mr. Blanchaed :

Q. Will you be kind enough to state the percentage of busi-
ness you do through New York? A. I have not an idea; I
should think now we are doing nine-tenths.

Q. And you do it because the aggregate charges between the
point of shipment and the foreign port by way of New York
are in advantage of New York on the great bulk of your busi-
ness ? A. Yes ; for a few months back.

By Mr. LooMis :

Q. The New York Central have two elevators in operation
now? A. Yes.

Q. One of which has been recently completed ? A. Com-
pleted, I think, about the first of June.

701

Q. They allow the loading of vessels on each side ? A. Yes.

Q. The other would allow the loiiding of vessels only on one
side ? A. Yes ; this one was built for business ; they say the
last one was built to please the Legislature.

By Mr. Blanchahd :

Q. Assuming that a vessel lies in the stream, in the Dela-
ware river, near Philadelphia, would the Pennsylvania road
lighter grain out to that vessel ? A. It would not.

Q. Suppose a vessel laid in the Patajjsco river, at Balti-
more, would the Baltimore & Ohio lighter it out to that vessel ?
A. No.

Q. Suppose a vessel lies in the harbor of New York, would
the New York companies lighter it out to the vessel ? A. No ;
they do, but they charge for it.

Q. What do they charge for it ? A. They charge for a bill
of lading alongside ship three-quarters of a cent a bushel.

Q. Not if your bill of lading calls for delivery ; what do they
charge ? A. My bill does not ; they would charge | of a cent
a bushel.

Q. Could you get a hill of lading in the west to deliver
along side of the ship ? A. Yes.

Q. If you took a bill of lading in Chicago, you would have
nothing to pay, would you ? A. They always charge | of a
cent ; you would pay J of a cent a bushel.

Q. For what ? A. One-half cent for discharging it outside
of the boat.

Q. I mean the delivery of the grain alongside of the vessel ;
I don't mean the discharge at all ; would there be any charge
for that ? A. Oh, we would have to take it out ourselves — the
same thing.

Q. If the railroad paid the boat from Sixty-fifth street to
■ that vessel, would there be any charge for that ? A. No, I
guess not.

Q. There is a charge in these other Cities ? A. Yes, sir.

Q. If you took a bill of lading at Chicago to deliver along-
side the ship at that point, what charge would be paid by you
to the floating elevator for the delivery of the grain from that
barge to the vessel ? A. In the port of New York ?

Q. In the port of New York ? A. Three-fourths of a cent.

702

Q. Now, what would you pay in Philadelphia for the same
services ? A. We would pay in addition to the elevating there,
about a half a cent a bushel.

Q. What is the elevating? A. A cent and a quarter a
bushel.

Q. That is a cent and three-quarters against three-quarters
of a cent in New York ? A. Yes.

Q. What would you pay in Baltimore ? A. I don't know ;
the ship pays the lighterage there.

Q. What would you pay iu Boston ? A. I have never had
a vessel load floated there ; the ship .sends around and gets
it from the elevator.

Q. Then there is a cent a bushel in favor of New York,
under those circumstances ? A. Yes.

Q. That is how much per hundred pounds ? A. About two
cents ; not quite.

Q. That is the whole difference you understand in the rate
of freight between the two cities ? A. Yes.

Q. Do you understand that to be the whole difference in
the rate of freight between the two Cities ? A. I understand
that is about what the difference is ; I can't tell exactly.

Q. Can you give the Committee a statement of the business
you have done through each one of these ports, for the last
two years? A. I could.

Q. Would you do so ? A. No, sir, I think not.

Q. Up to the present time, showing the decrease and the
increase at each port ? A. It would take about a month to
get ready ; I don't see what the Committee want of that.

Q. Will you state to the Committee how the ocean rates
by sale from the same cities compare with each other ? A.
Yes ; the ocean rate in Boston is always lower than any of the
other ports.

Q. By hail ? A. By sail and steam ; the rates in Baltimore
are ordinarily higher than New York.

By Mr. Sterne :

Q. How much ? A. By steam about a penny a bushel and
perhaps a penny-ha'penny a quarter by sail ; but just now
the rates are lower in Baltimore than thej' are in New Y'ork,
owing to the increased quantity of grain coming this way.

703

By Mr. Blanchabd :

Q. How are they iu Philadelphia ? A. They are higher for
steam freight and lower for sailing vessels.

Q. Than New York ? A. Yes.

Q. At this time ; or as an average ? A. Both at this time
and as an average ; that is as regards steamers ; as regards
sailing vessels they are ordinarily higher in Philadelphia and
Baltimore than in New York, owing to the difficulty of getting
up the river.

Q. Then I understand you that, taking the rail rate, the ele-
vator rate and the ocean rate, there is an average advantage in
favor of New York, which enables you to do nine-tenths of
your business in this port ?

Mr. Sterne — He does not say that.

Q. During the year 1878 ? A. Well, I can't tell for the
year we did a great deal of our business outside ; I say that
lately it has been as you state ; that is, the advantage has been
to this extent : that we save the cost of an agent at these
points, and that threw the balance in favor of New York, and
on the same basis we can bring all our business by New York,
where we attend to it ourselves ; we save the cost of an agent
by bringing it through New York.

Q. Where the rail rates are high from Chicago to New York,
can you not ship by lake and rail to New York at a price con-
siderably less than by rail to Baltimore V A. I don't know.

Q. Do you know anything about that ? A. I dont know.

Q. Do you make any shipments by lake from Chicago ? A.
Yes.

Q. Lake and rail ? A. Yes ; riot often, though.

Q. What is the present lake and rail rate from Chicago to
New York — do you know ? A. I don't know ; about six cents,
I think, a bushel.

■ Q. With a rate of 15 cents from Chicago to New York, and
12 cents to Philadelphia, it would be 7^% to Baltimore,
would it, by rail ? A. I don't know ; they have got some sort
of an agreement of that kind.

By M. Steene :

Q. You do not pay any attention to that ? A. No.

Q. You make a special rate in each case ? A, Certainly.

704

Q. Have you paid any attention to the agreed pool rates
that they now propose to charge ? A. Well, yes ; a httle.

Q. Have yi)u observed the differences that are made in those
pool rates between Philadelphia, Baltimore, and New York ?
A. Not particularly.

Q. Do you care anything about that ? A. Not a great deal ;
I take it for granted they will break them in a mouth — as soon
as they get an accumulation of cars.

Q. Notwithstanding the fact that they have an eastbound
pool ? A. They always have broken them ; I expect they al-
ways will.

CJ. If they would adhere to those rates, however, making a
difference of three cents a hundred in favor of Baltimore as
against New York, would not that be in favor of Baltimore,
three cents a hundred ? A. No ; I think we can beat Baltimore
at three cents ; we can't at five ; that I know.

Q. Do you mean to say that you can beat Baltimore ? A. I
think we can.

Q. You mean your own firm can ? A. Well, I mean New
York now.

Q. Could not a Baltimore shipper beat you at three cents a
hundred in his favor ? A. I think it is very doubtful.

Q. If he can get freight rates the same as you can, why can't
he to that extent ? A. He can't get his rates quite the same ;
I have already given in evidence that, as a rule, Baltimore rates
are higliei' than New York.

Q. You said a penny lia'penny a quarter ? A. Yes.
Q. That is about three cents on four hundred and some
odd pounds — how much is a quarter ? A. Four hundred and
eighty ; that is about a half a cent a bushel — about a cent a
hundred.

Q. Therefore, wouldn't he still have the advantage of two
cents a hundred? A. Yes; then we get a cent on the elevating •
that would make two ; then we expect to beat them a cent in
doing the business.

Q. How do you expect to beat them a cent in doing that bus-
iness? A. We can sell it better — buy it better, probably.
Q. You can sell it better ? A. Yes, sir.
Q. Will a cargo coming from New York, in the same class of
ship, of the same grain going to Queenstowu for orders, sell
any better because it comes from New York than from Balti-

705

more ? A. It will sell rather better because it comes from
Bingham Bros, than because it comes from Dick, Tom and
Harry.

Q. Now, if Bingham Bros, were to remove their business to
Baltimore, why then Baltimore would get the advantage of
Bingham Bros.' intelligence in that way ? A. I suppose it
would.

Q. Then you would beat New York, would you not? A.
Very likely; try to; we do not want to get driven awiy just
yet.

Q. Will you prepare for the Committee a statement showing
the rate from Chicago that you get via New York, and via
Baltimore, and via Philadelphia and Boston to Liverpool ?
A. For how long ?

Q. Well, for a year past ? A. I will allow any gentleman
whom you will employ to go in my office and do it for himself,
but I do not see why I should employ a special clerk to do it.

Q. And also showing the terminal the expense of lighterage,
elevating, etc. ? A. I will do anything in reason, but it seems
to me unreasonable that I should make a complete list of all
my business.

The CHAiRMAil — You have testified here that you have
shipped grain through all these ports, and you have also given
important testimony in regard to the cost of the terminal facil-
ities at the different points ; we do not care, so far as you are
concerned, about the rates you pay from New York to Chica-
go, or from Baltimore and Philadelphia to Chicago, by rail, so
much, but if you could prepare a statement illustrating the
entire cost or tax that grain pays started from Chicago to Liv-
erpool by these different routes, and lighterage, elevating,
trimming, what the ship pays, or whoever pays it, etc., so as to
show that up clearly from these different points, even if it does
not cover but one shipment, the Committee would be much
obliged to you.

The Witness — I will do that with great pleasure, sir.

The Chairman —The point is, to illustrate the expense of the
terminal facilities at those different points.

The Witness— Well, I can do that ; I see what you want.

By Mr. Blanchabd :

Q. I ask you as an expert, assuming that the rates to New

706

York are the standard, and the rates to Boston is not less, and
the rates to. Philadelphia were two cents less than to New York,
and the rate to Baltimore is three cents less than to New York,
and the rates are maintained under any pool in an average of
years, do you regard that as an unjust discrimination against
the interest of New York ?

Mr. Stekne — I object to that.

Q. Would you be able to do your share of business through
New York at those prices ?

Mr. Sterne — I object to that.

The Chairman— The witness has testified that he thinks he
can make a difference in his own handling of the grain. If
you will put your question so that he can answer that gen-
erally

By Mr. Blanchard :

Q. Then, let me ask you, assuming that the pools from the
west establish a rate of 20 cents from Chicago to New York,
and the rate is 18 cents to Philadelphia, and 17 cents to Balti-
more, and 20 cents to Boston, what is your opinion of the
effect of that upon the general trade of the City of New York
eastbound to foreign ports ?

Mr. Sterne — The grain trade.

A. The trade of New York, I think, can hold her own.

By Mr. Sterne :

Q. Do you mean by that that you think you can hold your
own ? A. I think we can.

Q. Do you mean by that, that everybody in New York can
hold his own ? A. I think so ; that is, those who do business.

Q. With three cents difference in favor of Baltimore ? A.
Yes ; I think perhaps you have got those three cents mixed np ;
those three cents are three cents a hundred ; the elevating is
one cent a bushel, which is a cent and three-quarters a hundred ;
that reduces it to a cent and a quarter ; then there is a differ-
ence in freight.

Q. If you are mistaken on the subject of elevating, then your
answer would not be correct? A. Well, we have worked in
practically.

Q. Answer my question simply ; if you are mistaken upon
the subject of elevating — if they do elevate in Philadelphia as

707

low as they do in New York, and lower in point of fact, why
then your answer would be different, would it not ? A. Well,
they don't ; I know wbat they charge there because we pay it*

Q. Well, if you are mistaken about that ? A. Well, I cannot
be mistaken, because I pay it.

Q. But cannot you be mistaken as to what the ships com-
pared with your pay ? A. Oh, yes; I do not know definitely
what the ship pays.

By Mr. Blanchaed :

Q. Has that any influence upon the question? A. Tliathns
a little ; we consider that the extra charge in Baltimore for towing
up the river is about equivalent to the difference in the cost of
loading a vessel here ; in other words, a ship at Hampton
Eoads for orders would just about as soon come to New York
as she would go to Baltimore ; a ship at Sandy Hook for orders
would rather come to New York than go to Baltimore at the
same price ; with a ship at the Delaware Breakwater, it would
be just an even thing which port she went to at the same price ;
a great many vessels come out to those three points for orders,
to go to either one of the three ports, and the ship pays these'
charges, and she would just as soon come to New York as to
any of the other three ports.

By Mr. Sterne :

Q. You think, then, that the rates just fixed by the east-
bound pool would make the four cities about on a level as to
the grain trade — is that it ? A. Well, yes, excepting Boston ;
it gives an unfair advantage to Boston.

Q. Because Boston rates are the same ; is that it? A. Yes.

Q. Then, vi'ould not that neutralize the advantage that New
Yoik has in its superb harbor ? A. To some extent ; yes.

By Mr. LooMis :

Q. Do you mean that each of those cities would get an equal
share of the grain trade under those conditions you have
stated? A. I do not think the share would change much
under those conditions.

Q. New York would maintain its present supremacy— is that
it? A. I think so ; remembering that New York has the cansd.

708

By Mr. Steene :

Q. New York's supremacy is due to the canal? A. Largely,
of course.

The Chairman (to the Witness)— I wish you would prepare
a sttitement.

The Witness — When shall I present that ?

Mr. Steene — To-morrow, if you can.

Josiah Lombard being duly sworn, testifies as follows :

By Mr. Stf.ene :

Q. What is your business ? A. Eefiner of petroleum.

Q. How long have you been engaged in tbat business ? A.
About ten years.

Q. Do you do your refining in the City of New York ? A.
I do.

Q. Do you get your oil from Pennsylvania? A. Yes..

Q. Have you in the past ten years ? A. Yes, a little from
New York State — not much.

Q. Do you know a concern known as the Standard Oil
Company ? A. I do.

Q. Do they do their refiniug in New York ? A. They do ;
and all over the country as well ; not in the city of New York,
they do not refine — in the vicinity of New York.

Q. You have had some experience in freighting petroleum
for your own concern ? A. I have.

Q. What is the name of your firm? A. Lombard &Ayres.

Q. Have you been placed at a disadvantage with any other
firm, and if so, with whom? A. We have been at a disadvan-
tage with the Standard Oil Company.

Q. How have you experienced that disadvantage ? A. We
have been charged excessive rates of freight as compared
with them ; we have also found it impossible to get trans-
portation at any rate over some of the roads.

By the Chaieman :

Q. Do you mean to say you have been refused transporta-
tion when you applied for it ? A. We have been refused trans-
portation.

Q. When you applied for it ? A. When we applied for it.

709

By Mr, Steene :

Q. Mr. Vilas has stated here that any shipper who shipped
an equal quantity with the Standard Oil Company could
obtain the same rate of transportation as the Standard Oil
Company obtained ; is there any shipper who ships anything
like an equal amount of oil with the Standard Oil Company ?
A. I think that if the books of the New York, Lake Erie &
Western Kailroad Company were examined, it would be found
that only ten cars of crude petroleum had been shipped to
New York by any shipper outside of the Standard Oil ■ Com-
pany or their connections within over a year.

Q. Do you mean to say that the whole shipment, practically,
that comes to New York over the New York Central and over
the Erie is for the Standard Oil Company and its connections ?
A. I do.

Q. What experience, if any, have you had in endeavoring
to get shipment of your own petroleum both with the Erie and
the New York Central Kailroad ? A. About a year ago, I, in
company with two other gentlemen outside of the Standard
Oil Company, were on our way to Buffalo on the New York,
Lake Erie & Western Boad ; we saw very many freight cars
fitted for the transportation of crude petroleum Ijiug idle; we
could not get cars enough to slii|) all the petroleum we wanted
to ; so we applied through oar agent, Mr. H. C. Olin, of this
city, to the New York, Lake Erie & Western Railroad Com-
pany for cars to transport petroleum to New York ; he had
sixty cars switched in at Carrolton, which is the shipping point
for the Erie road, and famished the oil for them into the pipe line
and ordered them to be filled and shipped to New York ; the
agent of the Standard Oil Coaipany appeared upon the scene
and stopped the shipment; the oil was held there — nearly ten
thousand barrels of it — for three or four months awaiting
shipment, and has never been shipped to this day ; the Stand-
ard Oil Company interfered and forbade the Erie Company to
ship it apparently.

Q. You have not been able to obtain your oil ? A. I have
not.

By Mr. Bianchaed :

Q. How do you know that they forbade it ? A. I will tell
you ; that is partly an inference ; I came to New York

Mr. Blanchaed — That is all I object to.

710

By Mr. Sterne :

Q. State precisely what occurred and leave out your infer
ences? A. Mr. Olin had those sixty cars switched in at Car
rolton imd telegraphed me at Buffalo that he would ship sixt
cars that day ; I replied : " Buy enough more to make a hun
dred and ship imiiiediately." Later in the day or the nex
luorning, I got a telegram from him saying that there was som^
difficulty about the shipment; I did not know what it was;
came back to New York and found nothing had been shipped
it was still at Carrolton ; I went t ) Mr. Vilas and asked hin
wliat the trouble was; he said h" could not give me any cars
I asked him why ; he says : " C.iarles Pratt & Co., have or
dered all the cars we have."

Q. Are Charles Pratt & Company connected with the Stand
ard Oil Co. ? A. They are a part of the Standard Oil Co. ;
said I saw hundreds of cars, or many cars, lying idle as
I went up to Buffalo; he said, "I cannot help that
they have oj'dered all the transportation we have ;" I said
"Did they not do it after we applied for this hundred cai'S,'
and he evadtiil that question ; I asked him, " \\^ill you furiiisl
us transportation ?' " When they do not want it I will ; wher
they want it you can have none ; " we waited some three oi
four months and had the oil ready for shipment, and I knoM
of my own perhonal knowledge of many other attempts made
during the past year to get transportation over the Erie Bail
way, and yet, as I say, there was only ten cars shipped outside
of the Standard Oil Co , so far as I know, and I think mj
knowledge is quito accurate on that point.

Q. How many cars do you think are ship))ed over the Erie
Railway during the year? A. I could not teil.

Q. What proportion did your hundred cars bear to the ship
ments in that month, for instance? A. There must be six oi
seven hundred cars a month — perhaps more — perhaps as higl
as a thousand cars.

Q. And you never obtained your oil? A. Never obtainec
it ; the oil remained there and declined from $1.40 a barrel tc
$1.00, while we were waiting transportation.

Q. How many barrels does each car contain ? A. From 8C
to 100 barrels.

Q. They run from 80 to lUO barrels ? A. They were made

711

originally about 80 barrels, and they have been enlarging
them ever since.

Q. What experience have you had with theNewTork Cen-
tral on the same point? A. At about the same time we were
very much in need of the oil here, had vessels on demurrage,
and we were anxious to get the oil forward ; I made an appli-
cation to tlie New York Central Railroad for 100 cars.

Q. To whom did you apply V A. Mr. Rutter ; I addressed
a note, I think, to Mr. Rutter — the Central Road, at any rate
— and received a reply from him after a while, saying t'hat he
would see me on the subject ; I went to see him, ard applied
for the 100 cars, offering to unload them myself if he had no
terminal facilities, or pay a reasonable charge for unloading
them ; I did not succeed in getting any cars ; he said that
the New York Central Railroad Company oyned no oil cars,
and they could furnish me none.

Q. Had you any conversation with Mr. Vanderbilt on the
subject ? A. Earlier in the year I had some conversation with
Mr. Vanderbilt ; shalj I give it ?

Q. Yes. A. He asked me where we were shipping our oil ;
I told him over the Pennsylvania Central road ; he wished to
know why we did not ship over the New York Central, as it
was more convenient for us ; I told him that we had a con-
tract with the Pennsylvania road ; he wanted to know why I
had not seen him ; I told him I thought he was so tied down
to the Standard Oil Company he would not do anything for
any one outside ; he said he was not ; I said, " very well ; this
contract expires in a short time, and then I will come and see
you ;" when the contract expired, which was along the first of
May, 1878, 1 went to see Mr Vanderbilt ; he referred me to Mr.
Ruttei', and Mr. Rutter said, " You know we have not any cars
nor any terminal facilities now ; I wish you would see Mr.
Vanderbilt again ;" I went back to Mr. Vanderbilt and saw him,
and told him what Mr. Ruttei said ; I said, " what will you
do ? " he said, " I cannot tell you now ; we will think over this
matter and I will send for you ;" that is the last I heard of it.

Q. You could not get any transportation on that road any
more than on the Erie ? A. I could not get any transporta-
tion on either of them.

Q. For your hundred cars of oil ? A. For any oil ; other
people tried, to my certain knowledge.

712

Q. Do you know of other people trying to get transporta-
tion over these two roads ? A. I do.

Q. With what success ? A. Tiie same success we had— no
success at ^11.

By Mr. LooMis :

Q. You answer from what other people have told you ? A.
I telegraphed bids to producers, offering them ten ceuts above
the market if they could get cars on either of those roads to
ship the oil.

By Mr. Steene :

Q. And they could not get them ? A. They could not get
them.

By Mr. Loomis :

Q. They said so ? A. They said so, and did not accept the
bid.

By Mr. Sterne :

Q. What effect has this had upon the oil business? A. To
drive it into the haads of the Standard Oil Company, of
course.

Q. Is the whole of the business practically in the hands of
the Standard Oil Company ? A. Over nine-tenths of it.

Q. Tell us what is the Standard Oil Company ? A. It is a
company with a large capital, operating over these four trunk
lines, and doing a large inland business ; it works under various
firm names, but the Standard Oil (Company own and control
the whole.

Q. What are those firms names? A. Charles Pratt & Com-
pany, J. A. Bostwick, Ward & Frew, of Philadelphia, the De-
voe Manufacturing Company, and half a dozen more.

Q. It is a combination of firms to control the business? A.
A combination of firms in one company — in one stock company.

Q. Have they any process of refining which other refineries
have not ? A. They have not.

Q. Then, "whatever advantage they have is derived from their
transportation facilities over these corporations ? A. Their

713

transportation facilities, and whatever business sagacity they
have, of course.

Q. Do they produce oil? A. They have some production;
compared with the whole production not large.

Q. How does their refining business compare with the whole
refining— about nine-tenths ? A. At least that.

Q. Since when has it grown to be that ? A. Within the
last three or four years the growth has been most rapid.

Q. Has, within the last three or four years, this refusal to
transport oil, been also the rule for other people ?

Mr. LooMis — There is no evidence that there has been a re-
fusal within the last three or four years.

Q. Have you been able within the last three or four years
to get transportation for oil over these roads ?

(Objected to.)

The Chairman — That calls for a fact.

A. I did not try until last year ; I didn't try it over these
roads uutil last year ; that is, we used to ship over both roads
— we have shipped" over the Erie and the New York Central
both.

Q. How long ago ? A. I think we stopped shipping over
the New York Central in 1872 ; over the Erie, probably in
1869 or 1870 ; I don't remember exactly.,

Q. What proportion of the whole product of the oil is it that
they themselves produce ? A. Perhaps a fiftieth or a sixtieth ;
something like that ; two or three per cent, possibly.

Q. And they refine about nine-tenths you say ? A. About
nine-tenths.

Q. And you attribute that wholly to their transportation
facilities over these lines ? A. Certainly I do ; over these and
other lines.

Q. Is that advantage then over other refiners also an ad-
vantage as to rates, as well as transportation ? A. Yes.

Q. Have you attempted to get the same rates as the Stan-
dard Oil Company, and been refused ? A. We have ; we have
been refused.

By Mr. LooMis :

Q. In the same tw'O instances you have spoken of? A. At
the same rates ne is asking now.

714

Q. In any but the two instances you Lave spoken of? A.
Oh, many times ; but not by these roads ; as I say, we have not
been shipping over these roads.

By Mr. Sterne :

Q. Are there any other New York roads that run to the oil
regions ? A. No other roads.

Q. "What effect has that had upon refiners not in business
with the Standard Oil Company here in the City of New York ?
A. It has forced most of them either to sell out to the Stand-
ard Oil Company, or to ally themselves with the Standard
Oil Company o)- go out of the business.

Q. Can you give us the names of persons who are not under
the organization of the Standard Oil Company, as to whom
you know they have been refused both transportation and
equal terms with the Standard Oi! Company — with reference
to the New York roads the question is ? A. They have been
refused transportation ; I can give you the names.

Q. Who are they? A. The Bush &Denslow Manufacturing
Company.

By Mr. LooMis :

Q. Is this hearsay evidence or evidence of actual personal
knowledge ? A. This is my personal knowledge.

Q. You heard some agent of the railroad company refuse
those parties ? A. The Bush & Denslow Manufacturing Com-
pany, or Denslow and Bush as it then was.

Q. I don't want particulars ; I only want to know whether
that is what they told you, or whether you had knowledge of
the transaction from the refusal being made in your pres-
ence ? A. They were interested in the oil I am speaking of.

By Mr. Blanchabd :

Q. This Erie oil transaction ? A. Yes ; other parties have
been refused.

Mr. LooMis — Is it competent ?

The Chairman— It is not; the only object in asking the
question was to obtain the names of the witnesses to be sub-
poenaed.

Mr. LooMis — If he is asked to state who he heard, without
going any further, that we will not object to.

715

The Witness— I can give you the uames : H. C. Olin, Bush
& Denslow Manufacturing Company, George F. Gregory,
Wilson & Anderson ; do you wish the names of the people
out of the State ?

Mr. Sterne — Yes ; anybody. A. Lewis Emory, Jr.

By the Chairman :

Q. Where ? A. Pennsylvania.
Q. What place? A. Bradford.

By Mr. Sterne :

Q. Over these two roads ? A. These were all over the Erie,
except my application for a hundred cars.

By the Chairman :

Q. And none of these parties were refused by either the
New York Central or the Erie ? A. They were all refused by
the Erie except the one

By Mr. Sterne :

Q. How is it about the Empire Eefining Company ; do you
know anything about that? A. They are a recent organiza-
tion ; I don't know anything about them.

Q. Are they under the Standard Oil arrangement? A.
They are not, as I understand.

By by Mr. LooMis :

Q. You stated in the opening of your evidence that you had
been charged excessive rates as compared with the Standard
Oil Company ; by whom have you been so charged ? A. By
the Pennsylvania Railroad Company.

Q. By that company alone ? A. No ; not by that company

alone.

Q. Well, mention any other company that charged you ex-
cessive rates as compared with the Standard Oil Company,
since you have been in the business ? A. The New York Cen-
tral Eailroiid Compi^ny.

Q. Any other ? A. I don't think of any other.

716

Q. You caunot mention any other company that has charged
you excessive rate ? A. I cannot think of any other.

Q. Was you ever refused transportation of oil, except in
the two cases you have spoken of? A. The one case

Q. Answer the question ? A. Well, the one request ex-
tended over a period of four months.

Q. You have mentioned two instances ; one where the
Erie refused to transport certain oil for you, and one where
you went to Mr. Vanderbilt and Mr. Kutter, and they told you
they had no cars— or at least Mr. Butter did — to transport
the oil ; now have you in mind any other instance than those
two where you have been refused transportation ? A. Not
personally.

Q. When did you begin this business of refining petroleum ?
A. Ten years ago, or more.

Q. 1868? A. Yes; 1868 or 1869.

Q. Where did you then carry it on ? A. In various places*
Newtown Creek, Long Island, and Jersey City and New York
City.

Q, Where in New York ? A. Sixty-sixth street, North
river.

Q. Have you continued at those three places ever since ?
A. I have not.

Q. When did you abandon Newtown Creek ? A. We only
run there about a year, I think.

Q. When did you abandon Jersey City ? A. In 1871 5
about that time.

Q. Then, substantially your business has been conducted at
one place, in the City of New York, at the foot of Sixty-sixth
street, North river ? A. Yes.

Q. What companies carried your oil when you began? A.
The New York Central Eailroad.

Q. You begun with them ? A. We begun with them.

Q. Did you have a contract with them ? A. We began
with that refinery there; before that, we shipped over the
Erie road.

Q. You begun with them with the refinery at the foot of
Sixty-sixth street ? A. Yes.

Q. What year? A. I think that was in 1869; I am not
sure.

Q. Did you have a contract with them then ? A. We had a

717

contract with them when we built — I think we didn't at that
time ; a little later we had a contract.

Q. How long did it run ? A. Five years.

Q. Did yon continue to operate under it during this term ?
A. We did not.

Q. You abandoned it? A. No.

Q. Or was it abrogated by mutual consent ? A. It was
transferred.

Q. Tou sold it out ? A. Sold it out.

Q. To whom ? A. J. A. Bostwick.

Q. Got your price for it, did you ? A. Got a price for it.

Q. It was your price, wasn't it? A. Yes ; we got our price.

Q. That was the i-eason you discontinued shipi:)ing over the
Central, wasn't it ? A. No ; we got our price for it ; but there
was another reason why we sold, if you wish to know.

Q. Tell us the reason you discontinued shipping over the
New York Central? A. Because with any rate- of freight we
could obtain with an investment in cars of about $40,000, and
a rental of some $9,000 or $10,000 a jea,v, we could make
more to ship over the Pennsylvania Central and let that prop-
erty lie idle thau we could using it, to ship over the New
York Central.

Q. At that time did you furnish the cars yourself ? A. We
furnished the tanks on the cars ; not the cars.

Q. When you applied to the company they had not the facil-
ities that you desired to employ in bringing your oil, had
they ? A. Originally we bought a line of cars.

Q. The railroad company did not have the facilities you
wanted, did they? A. They did not have any tanks.

Q. Tanks were necessary to ship the oil, and you bought
them and furnished them to the railroad company ? A. Yes.

Q. And they paid you for the use of them, didn't they ? A.
Yes.

Q. During the term of the contract ? A. While we held it.

Q. Until you sold it to J. A. Bostwick & Co. ? A. Yes.

Q. That sale included the tiansfer of those tanks, didn't it ?
A. Yes.

Q. When was it that the New York Central charged you a
higher rate than they charged the Standard Oil Company ?
A. It was during that time.

Q. During this contract ? A. During that time.

718

Q. For wliat period of time and on what quantity of oil did
tliey charge you a higher rate ? A. T don't know on what
quantity.

Q. For what period of time ? A.. I could not tell exactly.

Q. Can you say positively at all that they ever charged you
higher than they did the Standard Oil Company ? A. I can.

Q. How do you know ? A. I know it from the rates the
Standard Oil Company sold oil here for, and what they paid
for it there.

Q. Is that the only way ? A. "That is the only way.

Q. Then it is a matter of inference, from the sales of the
Standard Oil Company, that the Standard Oil Company got
their oil transported cheaper on the New York Central than
you did ? A. It is a matter of certainty.

Q. You make that statement from those facts ? A. I do.

Q. And from none others? A. And from none other.

Q, Have you ever since continued to ship over the Pennsyl-
vania road? A. No; we have shipped partly over the Penn-
sylvania road.

Q. How else have you shipped ? A. Shipped by canal.

Q. How much capital did you have invested in your busi-
ness when you began ?

Mr. Sterne — That strikes me as going further than we ought
to go into this gentleman's private affairs.

Mr. LooMis — I offer to prove by him that his business has
prospered.

(Evidence excluded.)

Q. When you went to Mr. Rutter's office do you wish the
Committee to understand that you went there in good faith ?
A. I certainly did.

Q. Did you not then have contracts for the doing of your
entire business with other lines ? A. We did not ; it was in
perfectly good faith I went there.

Q. Do you know how Mr. Rutter came to get the impres-
sion that the contrary was the fact? A. I do not know how
he did.

By Mr. Sterne :

Q. Do you know that he did at all? A. He intimated in
the interview that I did not mean to do any business at all,

719

but I told him that I came there simply as a business trans-
action.

Mr. EuTTER — You know you did not.

The Witness — I beg your pardon ; I came there perfectly
in good faith. I meant what I said, every word of it, when I
talked with you.

By Mr. Blanchaed :

Q. Mr. Lombard, is this case of Mr. Olin's to which you
have referred, in suit ? A. It is in suit.

Q. In the city of New York ? A. Yes.

Q. In which all the testimony on both sides is to bo pro-
duced ? A. Yes ; I understand so.

Q. You stated that you knew the cars were idle ; how did you
know our cars were idle ? A. Because we saw them on the
side track empty.

Q. What has that to do with it ; every car has to go on the
side track ? A. But not large strings of them, nearly half a
mile long.

Q. Where ? A. This side of Hornellsville.

Q. Hornellsville is a junction point for those companies ?
A. Yes.

Q. How do you know that they were not going out in half
an hour ? A. Because there was too many to go out.

Q. How do you know that ? A. Fiom the looks of them.

Q. How did yon know from the looks of them ? A. When I
see a hundred or more empty, cars strung along with no en-
gines between them, on a side track, in the middle of a rail-
road, I naturally infer that they are not all going out that
same day.

Q. Then it is a matter of inference, is it ? A. Certainly, as
anything of that kind would be.

Q. Do you know there was no oil in those cars ? A. Yes.

Q. How do you know that ? A. I know that from the fact
that when they have oil in them more or less of it leaks out
and shows upon the seams.

Q. Did you get out and examine those cars ? A. I did not.

Q. Then how do you know, riding past those cnrs whether
there was oil on the seams or not ? A. Because we were going
slowly and I could see.

720

Q. You could see distinctly going slowly ? A. We generally
can.

Q. Did you know whether those cars were bound west or
east? A. I did not ; I did not know whether they were bound
west or east.

Q. Then you have given the Committee an inference as to
idle cars, obtained by passing them while they were on sidings
while you were on a passing train ? A. Yes ; and stopping
opposite ?

Q. Did your train stop opposite those cars ? A. Yes.

Q. Opposite how many of them ? A. I could not tell you
that.

Q. Where you sat in your seat in the car you could see one,
could you, and could not see any more than one ? A. I could
see them all as we were going past slowly.

Q. What station ? A. I do not remember the station.

Q. Do you remember what train you was on ? A. Yes ; the
train that gets into Hornellsville at breakfast, in the morning ;
that train left at seven o'clock, I think.

Q. What was the first stop that train made this side of Hor-
nellsville? A. I do not remember.

Q. Were the cars at Hornellsville or this side ? A. There
were some at Hornellsville and some this side.

Q. They were in the Hornellsville yard, were they ? A. Part
of them.

Q. Now, when our eastbound business is 200 cars a day, how
do you know that one of those cars was idle because you saw
a hundred of them there ? A. Your eastbound business at
that time was not '200.

Q. How do you know it was not ? A. Because your own
shipments show it.

Q. How do you know ? A. I know it from the published
reports at that time ; the total shipments from the region at
that time were about 25,000 barrels a day, which would be
about 275 car loads ; of that the Pennsylvania roads takes a
third, the New York and Erie about a third, and the New York
Central about a third ; if you were shipping 200 cars a day the
total shipment would be close upon 60,000 barrels a day ; I
take the aver ige.

Q. This was nothing but a matter of inference with you

721

about those cars being idle ? A. They were idle ; how long
they had been idle 1 could not tell you.

Q. You do not know ; they might not have been there half
an hour, for the engines to be detached and attached again to
go? A. That is a matter of inference; I knew they were idle.

Q. You said you had a contract with the Pennsylvania Rail-
road ; will you state the nature of that contract? A. It was
a contract running one year with the Empire Transportation
Company, which was then running over the Pennsylvania Rail-
road Company's line, that we should have as low rates of freight
as any one else who shipped over that line, and that in the event
that -we could buy oil cheaper in the New York market than
we could ship it over their line, we were at liberty to buy it
in this market, providing we gave them the opportunity of
seUing it to us if they wished.

Q. When did that contract expire ? A. The 1st of May,
1878.

Q. Was the Pennsylvania road carrying oil for the Standard
Company at the same time — the first of May, 1878 ? A. They
were at that time, but not when we made the contract.

Q. Then you had a guarantee that you should have as low
rates as other people ? A. We did.

Q. And the New York Central and the Erie, could they
charge any more than the Pennsylvania road charged, and
get the oil ? A. They could not.

Q. Then practically you had the rates under your contract
with the Pennsylvania Railroad that prevailed by all the trunk
lines ? A. As long as it lasted we supposed we had ; we have
since found out we had not.

Q. How do you know you had not ? A. Prom the evidence
taken in the suit of the Commonwealth of Pennsylvania against
the Pennsylvania Railroad Company.

Q. How do you know you did not have as low rates as the
New York Central and the Erie ? A. I don't know that ; I was
just taking your position that they were the same rates as the
Pennsylvania.

Q. That is entirely a matter of inference ? A. On that point

it is.

Q. Are you a producer of oil ? A. I am not.
Q. Has the Standard Oil Company a hue ? A. I think not.
Q. Do you own any pipe lines ? A. No.
79"

722

Q. Does the Standard Oil Company own or control any
pipe lines? A. Tliey own a controlling interest in some pipe
lines.

Q. Tlien you are not a producer, and you control no pipe
lines '? A. We do not.

Q. You have to buy your oil at the point of delivery at
the railroad ? A. Yes, sir ; and the Standard Oil Company
has to buy nine-tenths of theirs.

Q. How do you know that? A. Because, as I say, they only
produce two or three per cent, of the whole production.

Q. How do you know that ? A. I know it from their own
statements.

Q. What statements? A. They told me last winter that the
productive interest was small.

Q. Who told you ? A. The Standard Oil Company.

Q. Who ? A. John D. Kockafeller.

Q. Told you what ? A. Told me that their productive interest
was comparatively small.

Q. What would you call comparatively small? A. I should
call 1,500 barrels a day comparatively small.

Q. Do you know whether they produce 1,500, or more or
less ? A. I should think in that ueighborliood — 1,500 to 2,000.

Q. Assuming that the Standard Oil Company was a producer
and piper of oil would they have an advantage over you? A.
They ought not to have.

Q. Would not they to the extent of the oil that came out of
the ground? A. They ought not to because the pipeline is a
common carrier, and if the business was honestly administered
we could get as low rates from the pipe lines as the Standard
Oil Company.

Q. Why, if they owned it? A. Because it is a common car-
rier.

Q. Would it change the nominal rate that they had actually
allowed you? A. It would be an actual rate to us both ; they
might make their dividend on their stock in the pipe company.

Q. Then actually the Standard Oil Company have an ad-
vantage, and a very large one, as the owner of the pipe line?
A. They would have the same advantage that we would have if
we had been stockholders in the pipe line.

Q. Do you kuow what rates the Standard Oil Company hay^
paid in the last few years? A, I know some of them,

723

Q. To what point ? A. That is on your assumption that yoil
give the same rates that the Pennsylvania road does ; I can
give you the rates.

Q. Will you please give them ? A. I should have to get the
evidence in the case.

Q. I will be obliged if you will furnish the evidence? A. Do
you wish me to state what the evidence is?

Q. State the rates ; I understand that you stopped shipping
by the Erie road in 1869 or 1870 ? A. I did.

Q. When did you make this demand for 100 cars for trans-
portation? A. I think it was about this time last year— a
little earlier, possibly.

Q. Then, for about nine years, you shipped nothing over the
Erie Railroad ? A. Nothing.

Q. Was that the first time you had asked for transportation
in nine years over the Erie road : A. I think not ; we had
shipped something, but not very much ; we were not regular
shippers over the road all that time ; we shipped some-
thing.

Q. Had you any tank cars running over the Erie road ? A.
At one time I think we ran nearly all the tank cars there were
on that road.

Q. What did you do with them ; how did you dispose of
them ? A. We did not dispose of them at all ; when the man-
agement changed, we found that we could not ship over that
road any more.

Q. What did you do with your cars then? A. We did not
own them ; we simply used them as other people did.

Q. Who did the cars belong to ? A. They belonged to the
Erie road.

Q. How many were there of them ? A. There were at that
time 200 or more ; I don't remember exactly.

Q. Do you know if those cars belonged to the Erie road ?
A. I was told so.

Q. You do not know that they belonged to the Erie Oil Car
Company ? A. I think they did not at that time ; this was be-
fore the days of iron cars, when there v.ere wooden cars ; I
think they belonged directly to the Erie road ; wooden tanks

on cars.

Q. Now, do you know how many tank cars the Erie Com-

pany owns now ? A. I think about 300 ; I am not positive A&
to that.

Q. You don't know how many tank cars the Erie has? A.
I do not, further than common report.

Q. Then the only complaint you have against the Erie Com-
pany, as I understand, is this one transaction ? A. This, and
the attempt, repeated many times, to buy oil where the pro-
ducer would furnish transportation, inasmuch as we could not
get it ourselves.

Q. That is simply a question between you and the producer ;
you only called for transportation from the Erie load once, I
understand you ? A. We called for it continuously; we left
the oil standing there ; Mr. Vilas says, " Whenever we have
cars idle you may have them ;" we leftthe oil there waiting for
those cars and never got them.

Q. If you had been a continuous shipper over the Erie road
from 1860 to 1868, and Charles Pratt & Co. had come as en-
tirely new shippers, would you have considered it fair to have
given them cars instead of you ?

Mr. Steene — I object to that.

Q. Are you a partner of Mr. OHn ? A. I am not ; Mr. Olin
was at that time acting as the agent of some of the refiners
outside of the Standard Oil Company.

Q. You are interested in the lot of oil now in suit ? A. Yes ;
we own half of it or more.

By Mr. Shipman :

Q. For wliich he applied for a mandamus ? A. For which
he applied for a mandamus.

By Mr. Gbady :

Q. As I understand you, after you made this trip, when you
saw the cars which you supposed were empty and idle, you
went to Buffalo? A. I went to Buffalo.

Q. Then you found there was some difficulty about the ship-
ment ? A. Mr. Olin telegraphed : " I have got sixty cars to-
day ;" I was very mucli pleased ; I immediately telegraphed
ba k : "Buy enough oil to make it a hundred ;" that night, or

^^5

the next morning, he telegraphed : " There is some difficulty
about getting the cars."

Q. Then you went down to New York? A. Then I came
down to New York, and saw Mr. Vilas.

Q. You told Mr. Vilas that you saw those empty cars on
the line of the road ? A. I did, and he did not deny they
■were empty and idle.

Q. That besides what you saw of the cars impressed you
that they were really empty and idle ? A. I was sure of it.

William H. Mcllhaiiney, being duly sworn, testified as fol-
lows :

By Mr. Sterne :

Q. What is your business ? A. I am foreign freight agent
■of the New York Central and Hudson Eiver Railroad, and the
Merchants Despatch Transportation Company.

Q. You make contracts for through freight? A. Some-
times.

Q. Well, is not that your business ? A. No, sir.

Q. Whose is it ? A. Agents in the west.

Q. Well, you do sometimes make them ? A. Yes, sir.

Q. When do you make them, and when don't you ? A.
Whenever I have an application from some party, when it is
more convenient to make it here than in the west.

Q. Any rule about it ? A. No rule whatever.

Q. How often does it happen that you make contracts for
through shipments? A. It may happen once a day and it
may happen once a week, and it may be a dozen times a day.

Q. You have an office for that purpose however ? A. For
what purpose ?

Q. For the purpose of making contracts ? A. No, sir.

Q. Have you not ? A. No, sir.

Q. What is your office for ? A. It is to take care of the
freights which are engaged in the west, and are in transit to
Europe ; looking after tbeiu liere, and seeing that they are
properly delivered, and making arrangements for the ocean
transportation.

Q. When you make contracts you make them under whose
authority ? A. The authority of the western road, at which
point the property would originate.

726

Q. Do you get any authority from Mr. Eutter ? A. Indi-
rectly, sometimes.

Q. When does that come ? A. When ?

Q- Under what circumstances ? A. Well, when Mr. Butter
has an interview, or about the time that he is in communication
with the parties representing the western road, oftentimes
Mr. Eutter would tell me to do a certain thing— very seldom,
if ever.

Q. That means to make a special contract as to foreign
fi-eights ? A. Yes, sii*.

Q. Now, have you made special contracts with David Dows
& Co. for foreign freights ? A. No, sir ; David Dows & Co. are
not exporters, and do no foreign business.

Q. Have you with Messrs. Bingham Brothers ? A. Yes, sir.

Q. What other exporters are there with whom you have
made special contracts? A. I bave made ih^ra with W. T.
Baker & Co., Eobert Warner & Co., Alexander Gaddis, W. P.
McLaren & Co., and I might run through the decalogue.

Q. Do you mean with everybody engaged ir the trade ? A.
With everybody engaged in the trade of exporting and ship-
ping through.

Q. Does everybody who is engaged in the trade get the
option to break bulk here ? A. If it is so understood ; yes,
sir.

Q. Well, is it so understood always ? A. If you will explain
what you mean by breaking bulk, I will answer the question.

Q. You were here while INIr. Bingham was testifying ? A. I
was.

Q. You have heard him explain the nature of his contract ?
A. I have.

Q. During the time that he had these contracts for breaking
bulk here, did everybody else who exported from the city of
New York have the same contracts ? A. At that time Bing-
ham Bros, were about the only exporters.

Q. You do not answer my question ; did everybody else —
every other exporter of grain — have the same contract that
Bingham Bros, had ? A. You are changing your question ;
you asked if every other exporter from New York ; you changed
that question the second time ; you said first exporters from
New York ; if you say exporters generally, then I will answer
you.

727

Q. Did every exporter to whom you were delivering grain
have the same contract that Messrs. Binghiam Bros, had dur-
ing the time that Bingham Bros, contract ran ? A. We never
delivered grain to exporters here.

0. Had every other exporter the same arrangement as
Bingham Brothers had ? A. Yes, sir ; those who exported
from tiie west through ; I am not talking aboht exporters in
New York ; you must understand there is a distinction ; there
are gentlemen who buy grain here in New York and export —
that is, send it forward ; there are others who buy grain in
the west and export ; I am talking about those who buy grain
in the west and ship through.

Q. Then I understand you to swear that all those that
bought in the west and shipped through had the same con-
tract that Bingham Brothers had ? A. I do not say so ; I said
they could haw had the same contract ?

Q. I am asking you whether they had? A. Some of them ;
yes.

Q. Who had and who had not ? We have with all our ex-
porters, I think, without exception, done just the same as we
have done with Bingham Brothers.

Q. At different times ? A. At different times.

Q. But I am speaking now of the time when Bingham Bro-
thers had the contract with that option ; had every other ex-
porter with whom you were doing business and who shipped
grain through, the same contract V A. If they had a contract
they had.

Q. Well, had they a contract? A. Well, that is a pretty
hard matter for me to answer.

Q. You do not want to answer? A. I can, sir; I say we
have given Eobert W^arner & Co. ; we have given W. T. Baker
& Co., and without examining the record I should say a dozen
others, the liberty of changing their shipments from Liverpool
to London, if they so desired, on the arrival of the property at
the seaboard.

Q. At different times ? A. At different times.

Q. But you are not prepared to swear that at the same time
you had a like contract with either of these gentlemen whose
names you have mentioned ? A. I am not prepared to swear
that those gentlemen had a contract at the sauie time ; it don't
follow.

728

Q. Then those contracts containing those options were
given to different people at different times and did not run
simultaneous!}' to all of your shippers? A. I will not say
simultaneously, no, sir ; they might not make a contract simul-
taneously, but if Eobert Warner & Co. or any other exporter
should come in my office at the time that David Bingham was
there, I should have given them the same option if they had
wanted it, or asked it, or even after the property was in transit
without having any contract whatever, if the shipper wanted
to change his shipments from one port to another he could
have the option then, and he can have it now.

Q. Is not that an advantage to the through shipment as
compared with the lo'ial purchase ? A. None whatever, sir ;
it is rather a disadvantage ; if they could stop the property
here and sell it, it would be an advantage ; but they cannot
stop the property, in consequence of which the local man has
the option of selling his stuff when it comes to New York ; but
the exporter on through contracts has not the option.

Q. You heard Mr. Bingham testify that you could not con-
trol him whether he should sell it or not ? A. Mr. Bingham
was in error, and I don't think he understood the question ;
Mr. Bingham could not control the property, and he could not
sell it here ; it is in my possession from the time it arrives in
New York until it leaves the port on some foreign bound
vessel.

Q. Then he was mistaken as to the identity of the goods
being thus preserved ? A. No, sir ; he is not.

Q. The identity of the goods is preserved in such cases?
A. Yes, sir.

Q. Did you keep oonti'ol of the property when you agreed
to allow him to break bulk here ? A. I do not understand what
you mean by breaking bulk ; we do not allow him to break
bulk ; we allow him to choose ports; if he makes a contract for
the property to go to Liverpool and he finds the property is
delayed in transit, the same as it was during the past winter,
that there has been a very material change in the Liverpool
market, and he asks the privilege of shipping it to London, we
allow him that privilege, or any other exporter.

Q. Or to any other port ? A. To any other port, yes, sir.

729

By Mr. Grady :

Q. Do yon retaiu control of the property under such a con-
tract as that? A. Yes, sir.

By the Chairman :

Q. You retain control until he gives you up this bill of
lading? A. We keep contiol until it is loaded on board of
the vessel ; then he gives up the bill of lading and the property
leaves the port.-

By Mr. Sterne :

Q. He has testified that one of the reasons why he makes
the contract is because he gets control of the shipment, and
can supply you other shipment in place of it as freight ?
A. That very often does happen ; Mr. Bingham is a very large
buyer and a large dealer in grain, and we very often have
steamers come here that are ready to receive property, and
in consequence of some delay on the railway, the property is
not here ; Mr. Bingham then, as a matter of accommodation,
can loan us the grain to load those vassels, in which case when
the grain comes afterward, we replace it ; it is simply a matter
of accommodation.

Q. Then you don't keep control of that particular grain ?
A. If a man lends me $10, when I pay him back, I won't say
that I will give him the same $10, but I will give him the same
value exactly.

Q. He will get grain, in other words in place of it ? A. No ;
Mr. Bingham and I understand exactly alike ; I don't think there
is any difference in opinion between us.

Q. My impression from Mr. Bingham's testimony was that
he could supply you wif^h the grain after he has agreed to
make the shipment, and that you would then supply him with
the grain, that you brought from the west for him ? A. I don't
think Mr. Bingham said so.

-^o

By Mr. Grady :

Q. Mr. Bingham said that he could walk into your office,
put down his bill of lading calling for a shipment from Chicago
to Liverpool, and say to you " Here, I want to pay the freight
from Chicago to New York," and that you would take that
out, and deliver him his grain ; now, is that so ? A. No, sir.
80

730

Q. What power have you got to keep that grain ? A. Mr.
Bingham can come in my office and say when the through bill
of lading on aspecial lot of grain thatisstill in my possession and
has not gone forward, that that grain was originally contracted
to go to Liverpool, but he wants it to go to London ; then Mr.
Bingham gives me an order what vessel to load it on ; the
grain is still in my possession, and the grain is loaded on the
vessel under my orders; after it is once loaded on the vessel
for export then Mr. Bingham surrenders his bill of lading, and
it is changed to London.

Q. But is the agreement that the shipment shall be from
Chicago to Liverpool that Mr. Bingham shall not sell that
grain in the New York market ? A. Mr. Bingham cannot sell
that grain in the New York market, because Mr. Bingham can
not get possession of the grain until it is put on board of tbe
vessel for export.

Q. He said that he coald get possession; how is that? A.
The grain is under my control, and he cannot get it.

By the Chairman :

Q. He could with your permission ? A. With mj permission
he could ; I have testified that he could not get that permis-
sion, nor no other party ; if Mr. Bingham should come to my
office, and I saw fit to do it, I presume that I could assume
the authority to do it.

By Mr. Grady :

Q. Mr. Bingham said that the agreement not to sell in the
New York market was simply aa understanding between you
and' him, which in honor he was bound to keep ? A. Yes, sir.

Q. Now is that all there is about it ? A. There is no writ-
ten agreement ; Mr. Bingham's word to me is ju^-t as good as
his bond.

Q. That is what it amounts to ? A. That is what it amounts
to.

Q. Then he can get his grain if he insists upon it ? A. No.
sir.

By Mr. Steenb :

Q. Has he ever obtained his grain ? A. No, sir.

731

Q. Then you would not give it to him, if he asked for it? A.
No, sir.

Q. Then, how did you rely on his honor at all, in the trans-
action ? A. I wouldn't give him his grain unless it was loaded
on the foreign vessels and not to be sold in this market.

By Mr. Grady :

Q. Must there not be something besides Mr. Bingham's
word, which is his bond, to jusiify you in retaining pos-
session of it iigaiust his will ? Isn't it because the shipment is
.a shipment through from Chicago to Liverpool? A. Most
undoubtedly ; I am not obliged to accept the through bill of
lading ; I can go on and ship the grain to Liverpool, in spite of
anything Mr. Bingham c-in do ; I have got the control of the
grain in every shape and form ; Mr. Bingham has no more to
say about tliat question, except so far as I allow him to do it,
than you have — not as mtich.

Q. And you agree to allow him only to change the port? A.
That is all ; I allow him to change ports on arrival at New
York, provided the market has changed; now, gentlemen, don't
get mixed in this matter ; Mr. Bingham only does that when
there has been a change of market, by which he can do better
by selling his grain in London than he can in Liverpool.

By Mr. Stebne :

Q. The rate from Chicago to Liverpool is generally less,
isn't it, than the rate from Chicago to New York, plus the pre-
vailing ocean rates? A. Not to my knowledge, sir.

Q. Is it the same ? A. Supposed to be ; yes, sir.

Q. Is it higher? A. No ; it is not hightr.

Q. What advantage does a man get by his through ship-
ment, then? A. From the fact that he can buy grain in the
western ma,rliet, and he knows just exactly what it is going to
cost him to lay it down at the foreign market ; he can take his
bill of lading to the bankers in Chicago and get the money on
the grain, and he can go out in the market and buy the same
quantity of grain, and so keep on increasing his business.

Q. But you say you never did, in any such through bill of
lading, allow the" goods to be delivered in New York and de-
duct the ocean freight from your through bill of lading ? A. I
never said so.

732

Q. Do you do that ? A. Yes, sir.

Q. In what cases do you do that ? A. In very rare and
special cases, when we have occasion to borrow grain to All
any contract that we may have, and then in replacing the
grain which comes forward.

Q. What do you mean to fill a contract? A. If we have a
contract to load an ocean vessel or steamer with a certain
quantity of grain, and we haven't the grain here, and Mr.
Bingham or Mr. Jones, or Mr. Brown, or any other party has
a quantity in the elevator, and could loan it to us for two or
three days, while our cars are coming in, we would take his
grain and load the vessel just the same as if the grain had
actually arrived, and then on the arrival of the grain we would
give him his property back again.

Q. Is that true as to other things except grain — provisions?
A. No, sir.

Q. Or salt meats ? A. No, sir.

Q. Never have delivered salt meats which have been
shipped on through bills to shippers here ? A. Yes, sir.

Q. WelljUnder what circumstances is that done? A. There
has been some cases where the property in transit has become
spoiled, and upon examination we found it was not fit for ship-
ping abroad, and to preserve the property rather than to let it be
entirely destroyed, they would surrender to us the through
bills of lading, and we would make the delivery of it to them.
Q. Are those the only cases ? A. Those are the only cases.
Q. None others? A. None others.

Q. Did you make a personal investigation in those cases as
to whether the property was really destroyed ? A. No; we
have confidence in our merchants generally ; we don't go into
these matters perhaps so closely as a lawyer would.

A. And no cases where that is pre-arranged? A. None
whatever.

Q. That the claim should be made that the property has
been spoiled? A. No.

Q. In the nature of a drawback or overcharge ? A. No, sir.

Q. Now, you make special rates sometimes ? A. ^es, sir.

Q. When do you make them, and to whom — to anybody

that comes along ? A. Yes ; if I feel disposed to do it I do ;

generally I do ; if a man wants a special rate, and I am author-

733

ized to make a special rate, I will give it to him ; the first man
that comes is first served.

Q. And the same rate to everybody? A. Yes, to the extent
of our facilities.

Q. No matter how much or how little he ships ? A. Well,
in the business I am engaged in the shipments generally are
large ; there is very little difference between most of them in
the cases where I make contracts.

Q. When you make contracts you make contracts which
cover from the point of shipment to the point of delivery in
Europe '^ A. In some cases ; yes.

Q. How many instances are there of that class of contracts
within the past two years ? A. It would be impossible to
answer.

Q. You know ; you keep your own books, do you not, show-
ing those contracts ? A. No.

Q. Wiio keeps them ? A. We don't keep any book.

Q. Who keeps them ? A. I say there is no book kept.

Q. Of those contracts ? A. No, sir.

Q. How is there any evidence of it preserved? A. Any
evidence of what ?

Q. Of the contracts. A. We have no occasion to preserve
the evidence after the shipment is completed.

Q. How do you know what rate to charge ? A. We have a
memorandum at the time the arrangement is made, and after
the contract is filled and the property shipped we have no fur-
ther use for it.

Q. Do you destroy it? A. We do not keep anything to
destroy ; Mr. Bingham generally sends us a letter, as he says ;
we hold tha'; letter until the property is shipped, and then we
have no further use for it.

Q. Then, you destroy it ? A. I don't say we destroy it.

Q. What do you do with it ? A. It may go on file.

Q. Where ? A. In the office.

Q. In the office in Broadway, where you are ? A. Yes, sir.

Q. You accept them, don't you, or does Mr. Eutter accept
them ? A. I accept them if they are correct ; if they are not
correct I send them back.

Q. How many such letters are there ? A. I could not say ;
there might be one a day and there might be one a month.

Q. Are they on file ? A. I could not say.

734

Q. You cannot tell whether you keep those letters or not?
A. I don't think they are kept ; they may be filed ; I can as-
certain.

Q. You do not know whether you have kept letters in the
last month ? A. I do not ; I presume I have.

Q. You do not know whether you have kept letters in the
past three or four months? A. I don't know that they have
been kept ; we have no more use for them after the shipment
is completed and the property gone forward.

Q. How long does it take to complete a shipment by a sail-
ing vessel from the beginning of the contract out west till the
sailing vessel reaches her port at Marseilles ? A. Until the
vessel reaches the port at Marseilles we have nothing to do
with it; after it reaches New York our shipment is complete ;
then we are done with it.

Q. Do you make through bills of lading to Marseilles ? A.
Yes, sir.

Q. If you make a through bill of lading to Marseilles at a spe-
cial rate which you name, is such transaction complete before
you dehver at Marseilles? A. Yes, sir; upon delivery to the
ship our responsibility in the transaction ends.

Q. If you agree to deliver at Marseilles, does the transaction
end then ? A. Yes, sir.

Q. When you deliver on board ship ? A. On board ship in
New York.

Q. How do you explain that? A. The through bill of lad-
ing explains that, sir ; we simply make a rate through, and
upon delivery to the ship our responsibility ceases.

Q. When do yoa collect your freight through ? A. When
we deliver to the sljip.

Q. Then the freight to the ship is paid by whom ? A. It
depends upon what kind of a contract it is ; if it is a contract
for through cargoes of grain, the amount is paid by the shipper ;
if it is on a through bill of lading of what we call a general
cargo — provisions, or something of that kind — it may be paid
by the ship, or may be paid by the shipper ; it is merely a
matter of agreement at the time.

Q. Are there not many agreements that do not run out until
the vessel reaches the other side ? A. There is no agreement
that I know of, sir, that runs to the other side.

Q. Suppose it should be found that there should be a large

735

amount of grain charged for that never went into the hold of
the vessel at all ; how, if you destroy your contracts, do you
know what was agreed to be done? A. I don't understand
jour question.

Q. Suppose a reclamation is made upon your company for
failure to deliver to the ship the full amount that the through
bill of lading calls for ; how do you check it ; how do you know
what the contract was? A. We have a record of the quantity
shipped in each vessel.

Q. How do you check it with the quantity that is agreed to
be shipped ? A. The bill of lading shows the quantity that we
receive, and which we are responsible for ; and the difference
between the quantity shipped and the bill of lading is the
amount we are short, if any ; those cases never have arisen
that I know of.

Q. Does the bill of lading accompany those contracts? A.
What contracts ?

Q. Those special contracts that you make to shippers ? A.
The bill of lading is a contract.

Q. No, you would not call a letter, for instance of Messrs.
Bingham Bros., to you asking you for a special rate or through
rate from Chicago to Liverpool, a bill of lading, would you ?
A. No, sir.

Q. That is not a contract is it? A. What is not a contract —
that letter ?

Q. That letter ? A. It is merely a confirmation of the con-
tract.

Q. Now, does the bill of lading accompany that at all? A.
No, sir ; that contract is made before the property is shipped,
and the bill of lading is not issued until after the property is
shipped.

Q. How many of those special contracts do you think you
have made?

The Chaibman— Within what period ?

Q. Within the past two years ? A. Very few ; I could not
tell you how many ; I could not approximate.

Q. Few as compared with the total shipments, do you mean?
A. Scarcely nothing as compared with the total shipments.

Q. Few as compared with the total through shipments? A.
Very few indeed.

736

Q. So the great bulk of through shipments are made on
through bills of lading on through shipments without special
contracts ? A. I won't say that sir ; you are asking what I do.

Q. I am asking your department ? A. You asked me about
special contracts which I make ; that is what I am answering ;
now ask any other question you please.

Q. I am asking now a question — whether the through shi[)-
ments made by special contract through your otBce were few as
compared with the through shipments that were made without
special contract through your oflSce ? A. I should say they
were very few indeed.

Q. Have you any knowledge of special contracts that are
mnde that do not go through your office? A. I have no record
of contracts that are made in the west at all ; the bulk of the
contracts are made in the west — in fact a very large majority
of them are made in the west.

Q. Do you get notice of them in some way or other as to
what the rates are? A. I simply am advised of the contract
with the amount of ocean freight to he provided for.

Q. Do those vary largely from lime to time? A. In what
way ?

Q. Well, do they vary largely from the schedule rates ? A.
Does what?

Q. These special contracts and special rates that are made
in the west for ocean freights ? A. I said I was only advised
of the ocean proportion of the rates.

Q. Do they vary largely from the rates that prevail at the
port of New York for charter parties at the same lime ? A.
They are supposed to be the same.

Q. I don't care what they are supposed to be ; do the rates
that they get vary largely from the prevailing ocean rates at
the time ? A. No, they are the same ; they are the ocean
rates which prevail here.

Q. Why should you be advised of them if they are the same ?
A. Simply that lean provide the ocean tonnage for them.

Q. Then the special contract always provides for the ocean
rate as it then prevails ? A. Well, I wish you woxild illustrate
what you mean by a special contract.

Q. You know it as well as I do ; there is a schedule rate on
through freights, is there not ? A. No, sir.

737

Q. There is noschedule rate ? A. Let me understand what
you mean by through freights.

Q. There is no schedule rate, is there, at which any shipper
at Chicago, without going to any office, can get his goods billed
through to Liverpool ? A. We do not bill goods through to
Liverpool.

Q. Get a through rate to Liverpool ? A. There is no pub-
Hshed tariff, not by any means, because they vary as often as
the ocean rates.

Q. Do they vary as often as cut rates vary ? A. Yes, sir.

Q. Then, in addition to the variations that are made by the
special contracts from east to west, they vary also with the
ocean rates? A. Yes, sir.

Q. And they are one thing to one shipper and another thing
to another shipper ? A. Not necessarily.

Q. Are they not in point of fact? A. No, sir ; decidedly no.

Q. If I ship grain in the morning at one rate, and another
man ships grain in the afternoon at another rate, are they
not ? A. In that case they would be.

Q. Don't that very often happen ? A. Yes, sir.

Q. Then there is the same variation as to Liverpool that there
is as to New York? A. As often as rates change, of course
there is a variation ; they may change a dozen times a day.

Q. Have you any cases of shipment for Liverpool without
any special arrangement, or are they all made by special ar-
rangement? A. So far as I am concerned the making of the
rates for the through business is done entirely in the west, with
the exception of some very rare instances, which I have already
testified to, when we make the rate in New York ; to answer
your question in a general way I should say that a large ma-
jority of the business paid the same inland rate that the local
business pays which stops at the seaboard ; in fact, as far as
possible we make the through rates based upon the same in-
land rate which is prevailing at the time of the contract.

Q. Now, in case of those special letters that pass between
your office and the shipper here, what is the rate thatisnam2d
in those letters; is it larger or less than the prevailing rate?
A. Than what prevailing rate ?

Q. The tlien prevailing rate ? A. What rate do you mean ?
you understand you are talking about two kinds of freight —
through freight and local freight.
81

738

Q. I understand — ocean freight and land freight ; are they
larger or Ifess than the prevailing rates ? A. I presume that
vdthout examining them carefully, if I can find them, they are
about the same.

Q. What possible object is there then in making any special
contract ? A. The special contract is in regard to the inland
freights ; you are talking about through freights.

Q. Mr. Bingham told us here that his contract was to cover
through freights ? A. Yes, sir.

Q. And he gave us the synopsis of a letter he would write
to you ; now, have you any such letters ? A. I have, I think,

Q. Which apply to both rates ? A. Yes, sir ; I think I have,
if I can find them.

Q. Will you produce those that cover the two rates within
the past year ? A. If I can find them I will ; yes, sir.

Q. And let us know whether or not you have -made during
the same time contracts with other people which are not cov-
ered by those letters ? A. I will, so far as I can ; you will
understand that I make very few contracts, indeed.

Q. Can you fulfill the requirement to furnish the Committee
that information ? A. Yes, sir.

Q. Give us a few that you have made during the past year ?
A. I will do it, so far as 1 can.

Q. Do you make contracts with the option to ship either
from Boston or New York ? A. I have done so.

Q. At the same rates from the west ? A. Yes, sir.

Q. Are the rates west the same from Boston as from New
York? A. No, sir.

Q. Are they generally higher or lower ? A. Which one —
New York or Boston ?

Q. Boston or New York ? A. Boston is generally lower than
New York.

Mr. Grady — Do I understand your question to be the rate
to or from Boston ?

Me. Sterne — To Boston, from the west.

The Witness — I am talking about through freights ; now,
please don't get mixed up on my testimoney ; I answered an
entirely different question from what yon just stated.

By Mr. Grady :

Q. What I want to know is, is the inland rate to Boston
less than to New York ? A. No, sir.

739

Q. Is the ocean rate from Boston to Liverpool less than from
New York? A. Yes ; as a rule it is.

By Mr. Sterne :

Q. And the through rate by Boston is lower than the
through rate by New York ? A. Yes.

Q. And you make these^contracts here in New York ? A.
Yes.

Q. Wi^h the option of either Boston or New York ? A. I
' have done so.

Q. And does Mr. Butter authorize those contracts ? A. No,
sir.

Q. And he don't authorize you to make them ? A. No, sir.

Q. Have you special authority to make them, or general
authority to make them ? A. Yes, sir.

Q. From anybody else than from Mr. Butter ? A. Yes, sir.

Q. From whom? A. The western roads.

Q. Does the New York Central take its proportion of that
rate ? A. I presume they do.

Q. You havn't heard any objection from them? A. I have
not.

Q. Do you know of any special advantage, or advantages,

that are afforded to anj' particular steamship or steamships, as

compared with others as to the lightering or elevating? A. I

do not.
«

Q. You would be very much surprised to know that there
were such ? A. I would, most undoubtedly.

Q. You have charge of that business? A. Generally ; yes,
sir.

Q. Isn't there an elevating charge made to sailing vessels in
the harbor of New York ? A. No, sir ; in the harbor of New
York there is ; yes, sir ; it isn't made by us.

Q. Made by Twombly <fe Whitney? A. No, sir ; it is made
by the floating elevators, and the stores around Atlantic docks
and other places.

Q. You elevate without charge ? A. At our elevators we
do ; yes, sir.

Q. To steamers ? A. Yes, sir.

Q. Sailing vessels ? A. Yes, sir.

Q. If Funk, Edye & Co. have paid elevetor charges within

740

tHe past three months, that was an imposition, was it ? A. I
don't know, sir ; it would depend entirely upon the circum-
stances.

Q. If they paid it to Whitney & Twombley ? A. I don't
know, sir ; I am not the keeper of Messrs. Whitney & Twomb-
ley's business ; I don't know what they do.

Q. Are not Whitney & Twombley the gentlemen who oper-
ate the New York Central's elevators ? A. Twombley & Co.
do.

Q. Whitney is now dead ? A. Yes.

Q. How long has Whitney been dead ? A. I think he died
sometime during the winter — say six months.

Q. Don't you know that the " Unicorn " Line of boats are
loaded free of elevating and wharfage, and that other boats
are not? A. No, sir.

Q. Do you send your freight frequently to Boston ? A. We
have a large line of freight going to Boston all the time ; yes,
sir.

Q. What proportion of the amount of freight that you ship
over your line, for foreign going vessels, goes to Boston, com-
pared with New York ? A. I couldn't tell you.

Q. Haven't you any means of knowing ? A. No, sir.

Q. Don't you determine what freights go to Boston, and
what freights go to New York for export, from Albany ? A.
No, sir.

Q. Who determines that ? It is determined in the west at
the time of shipment.

Q. You have no means of knowing ? A. I have no means of
knowing, sir.

Q. Have you any estimate in your own mind ? A. No, sir.

By Mr. Depew :

Q. Under what circumstances do you arrange for the op-
tion for Boston or New York? A. It would be in consequence
of the scarcity of the tonnage, or what we might think would
be a scarcity of tonnage in New York, aud in the event of ocean
tonnage not being here to carry the property, we would send it
to Boston.

Q. That is, when the steamship facilities are not enough,
and the goods have to go forward, then you send to Boston ?

741

A. Yes, sir ; the steamship facilities, or the sailing^ vessel facili-
ties— in fact, any facility ; it simply has reference to the
ocean transportation, and not to the inland.

Q. Do you endeavor primarily always to bring it to New
York ? A. Ninety-nine out of every hundred cases we bring
to New York.

By the Chaikman :

Q. When you speak of sending it by way of Boston, you
don't mean sending it from this port to Boston ? A. No, sir.

Q. Sending it from Albany you mean ? A. I might explain,
Mr. Chairman, that, oftentimes, in taking a line of freight we
find, after the freight has started — in fact, when we make the
contract — that there is a rush of freight coming to New York,
and there is getting to be a scarcity of vessels ; now, then, as a
rule, they give lower ocean rates from Boston, so it is safe for
us to make a contract, knowing that we can send to Boston in
the event of our being short of tonnage on ocean transportation
in New York ; when the property is in transit, and it is found
that our ideas are correct — that there isn't going to be suffi-
cient tonnage to carry it away — we then exercise the option
and send it to Boston ; we make those options very largely,
but we exercise them very seldom — in fact, I can't tell when I
had a case.

Adjourned to 10 o'clock a.m., Tuesday, June 24th, 1879.

New Yokk, June 24th, 1879-

The Committee met pursuant to adjournment.

Present : All the members except Messrs. Husted, Low and
Wadswoeth.

James 0. Fargo, being duly sworn, testified as follows :

By Mr. Stebne :

Q. You are President of the Merchants Despatch ? A. I
am.

Q. How long have you been connected with it? A. Twenty-
nine years.

742

Q. When did the Merchants Despatch first make a contract
with the New York Central Railroad ? A. Soon after they or-
ganized.

Q. In 1853 ? A. Yes, sir; we have done more or less busi-
ness with them since 1853 or 1850.

Q. You were President then ? A. Oh, no ; at that time the
Merchants Despatch was owned by the American Express
Company.

Q. How did it develop into the Merchants Despatch ? A.
■In 1871, by an arrangement with the different raih'oads through
the country ; it was organized as a joint stock association ; co-
partnership.

Q. In copartnership with the different railways ? A. A joint
stock association, the different railways becoming partners in
the business.

Q. How many private partners are there, and how many
railways ? A. Four or five.

Q. From four to five private partners ? A. Yes, sir.

Q. Is all the stock held by four or five people ? A. The
larger portion of it.

Q. You were requested to bring your stock ledger ; did you ?
A. I did not : it is not in my possession.

Q. Where is it ? A. In Cleveland ; the General Manager's
office.

Q. Is it organized under the laws of Ohio ? A. No, sir.

Q. Organized under the laws of the State of New York ? A.
No, sir ; it is a copartnership.

Q. Are there articles of copartnership ? A. No, sir.

Q. Articles of association? A. Yes, sir.

Q. Have you a copy of those ? A. I have not ; they are in
our General Manager's office in Cleveland.

Q. Havn't you an office in the City of New York ? A.
We have.

Q. Was not the copartnership or organization made in the
City of New York V A. It was, or at least the negotiations
were carried on here.

Q. Is not the American Express Company a New York or-
ganization? A. No, sir.

Q. Is it an Ohio organization? A. It is a joint stock organ-
ization, copartnership, the same as the Merchants Despatch.

Q. Is it not a New York organization ? A. No, sin

743

Q. Of what State is it? A. No particular State; it is a
copartnprsliip with stockholders in eyery State of the Union.

Q. You were requested to furnish a copj- of your stock list ;
have you done so ? A. I have not ; it is not within my
power.

Q. Why isn't it in your power? A. The stock ledger and
stock lists are in the General Manager's oflBce, in Cleveland.

Q. This gentleman is connected with you? (Pointing to
Mr. Cole.) A. Mr Cole is the attorney of the Merchants De-
spatch Transportation Company.

Mr. Hamilton Cole — I would like to make a statement to the
chairman of this Committee : This organization, the Merchants
Despatch Transportation Company, is, as Mr. Fargo says, sub-
stantially a partnership ; it is not a corporation, it is not or-
ganized under any law of this state ; it is not itself, I suppose,
subject to investigation on the part of the Legislature ; we
are perfectly willing to answer all questions before this com-
mittee as to the connection of this company with any railway
chartered by this state, or any person connected with those
railways, either as officers, or in any capacity whatever ; be-
yond that we are not willing to go, for the reason that it seems
to'us to be infringing on the rights of private parties in this
case ; Mr. Fargo is perfectly ready and willing to answer any
questions in regard to the relations of the chartered roads of
this state, their connections with this company, the amount of
stock held, or the amount of stock held by any one of the
officers of such road ; that is, I suppose, all the information
the Committee desire.

The Chairman— You mean b^ that the officers, employes
or attaches?

Mr. Cole— Yes, sir ; of any of the chartered roads of this
State. That he is perfectly wiUing to give ; but beyond that
he don't think he is authorized to go.

Mr. Baker — Are the certificates of this corporation filed in
the office of the Secretary of State ?

Mr. Cole — No, sir. It is organized under no general or
private law. There is a responsibility resting upon all the in-
dividual members of this concern, precisely in the same man-
ner as there is upon the members of any firm, for the debts of
Jthe whole concern, and that may, as you will readily see, be a

744

reason why a number of private individuals who are stock-
holders in this concern, should not have that fact known.

Mr. Baker — They issue certificates of stock ?

Mr. Cole — They issue certificates of stock.

The Chaieman — The proposition covers everything we want;
of course, all we want is the relations of this accociation to the
railroads of this State.

By Mr. Steene :

Q. Did you negotiate the contract with the New York Cen-
tral Railroad Company ? A. I did.

Q. When was the first contract made with the New York
Central Eai.lway Company ? A. In 1871, for this organiza-
tion.

Q. For the Merchants Despatch ? A. Merchants De-
spatch Transportation Company ; the line and business was
previously known as the Merchants Despatch ; under the
present organization it is known as the Merchants Despatch
Transportation Company, the contract for which was nego-
tiated in 1871.

Q. What is the capital stock of your association ? A. Thir-
ty thousand shares.

Q. Three miUion of dollars ? A. It represents three millions
of dollars ; it is in shares.

Q. Have you any contracts with any other corporations,
except New York Central and Hudson Eiver ? A. Not within
the State of New York. '

Q. Beyond the State ?

Mr. Cole — That I object to, Mr. Chairman.

The Chairman — Let him answer whether he has or not ; we
want to know whether it is confined to the State of New York
or not ; that is a proper question.

By Mr. Sterne :

Q. What is your answer? A. We have.

Q. Isn't it with such railroad companies only as run in con-
nection with the New York Central ? A. No, sir ; the con-
tracts are general with nearly ever road east of the Missouri
river.

Q. What do ydu.furnish to the New York Central and Hud-
son River Railway Companies other than freight cars ? A.

745

We furnisli about 4,000 agencies in the United States and Eu-
rope without any expense to them.

Q. They don't pay any part of your agencies ? A. No,
sir.

Q. Has your capital stock been increased recently ? A.
No, sir.

Q. Is it the same now that it was originally ? A. It is.

Q. Was it all fully paid in ? A. No, sir.

Q. What proportion was paid in, and what proportion not?
A. Twenty-five per cent, was paid in.

Q. Therefore, the capital stock really represents about
$750,000 in actual paid in capital ? A. Yes, sir.

Q. Was but $750,1)00 issued and fully paid, and the rest re-
mained in the hands of the Merchants Despatch Company's
treasurer, to be used by them as they saw fit ? A. I don't
think I understand the question.

Q. In the organization of the company, was twenty-five
cents on the dollar paid on each share, or was twenty-five per
cent, of the whole capital fully paid, and the remaining pro-
portion of the capital stock — two millions and a quarter — re-
mained in your hands to be issued as you saw fit ? A. It was
paid on the full capital issued ; twenty-five cents paid on each
share issued.

Q. Then it was fully subscribed and paid for to the extent of
twenty-five cents per dollar on each share ? A. No, it has not
been fully subscribed for.

Q. Is there still remaining any ? A. Yes, sir.

Q. How much remains behind ? A. About 2,300 shares, I
think ; from 2,300 to 2,500 shares.

Q. What dividend has been paid upon that stock since its
organization since, 1871 ? A. No dividends paid until within
the last four years ; paid ten per cent, a year I think.

Q. Ten per cent, on full paid stock? A. On the stock
issued.

Q. That is ten dollars a year on twenty-five dollars paid in,
isn't it ? A. Yes, sir.

Q. The contract you say, was negotiated by you ; how many
cars did you furnish the New York Central Railway ? A. None
to the New York Central Eailway direct ; we furnished 600
cars at the organization of the company ; those cars were not
furnished to any particular road ; they were furnished for the
82

7J6

business of the company, to be run anywhere between here
and San Francisco ; wherever the business calleclthem.

Q. Was 600 cars the full complement that you delivered?
A. At that time ; yes, sir.

Q. How many in all ? A. We have now 3,451.

Q. I mean under your contract with the New York Central,
how many have you delivered to them ? A. None to them ;
we furnished 600 cars for the business at the time of its organ-
ization ; they were not furnished to any one road

Q. Mr. Eutter testified that under your contract with them,
a certain number of cars of yours were running on their road,
3,000, I believe, or something of that kind ; is he mistaken
on that point ? A. 3,4ol cars in the service, but they are
not on the New York Central road.

Q. They pay trackage on that ? A. They pay on the cars
that run over their road ; certain number of the cars are
furnished to that road ; but all of them run there.

Q. The New York Central keeps the cars in repair ? A.
They are what is called the home company ; they look out for
the condition of the cars.

Q. Do you supply new cars as the old ones wear out ? A.
We do.

Q. Have you during the past four years done so to the New
York Central? A. None of our stock has worn out since the
organization of the company.

Q. What is the value of a freight car ? A. It depends upon
the build of it ; some are worth more and some less.

Q. What is the value of the freight cars you furnished ?
A. 400 to 800 dollars.

Q. What is the present value— they were higher in value or
jirice a few years ago than now ? A. I suppose new cars could
be built for |500 ; about that ; ordinary freight oars.

Q. Don't the New York Central Uailway Company pay com-
missions to your company ? A. They do.

Q. Don't they monthly, by vouchers, under your contract?
A. They pay us commissions monthly, by vouchers.

Q. Pay you commissions for all the business you bring to
them, don't they? A. Yes, sir.

Q. And pay that in addition to the use of the cars — trackage ?
A. Yes, sir.

747

Q. Then, why do you say you furnished these agencies
without expense ? A. They pay no portion of the expenses
of our agencies.

Q. Don't those commissions cover the expenses of your
agencies ? A. For our services rendered to the New York
Central road ; you can assign the commissions to salaries of
the agents, or any other expense, repairing the cars, or any-
thing else.

Q. But you do not repair the cars ; they repair them at
their own expense ? A. No, sir ; at our expense.

Q. And they charge you for the repairs ? A. Yes, sir.

Q. And deducted it from the commissions ? A. Yes, sir ; or
rather we pay it ; they are never deducted froro the commis-
sions ; they are separately made ; they pay us for our commis-
sions, and we pay them for their repairs to the cars.

Q. What percentage do you get in the way of commissions,
from the New York Central ? A. They vary in accordance
with the different classes of the business and the direction it is
moving.

Q. Do you bring them eastbound as well as westbound busi-
ness ? A. We do.

Q. How does the contract that you made in 1871, differ from
the one that had been in existence prior to that time ? A.
Under the former system of doing business, the Merchants
Despatch business was done at a car rate, between here aud the
west ; they paid so much for the car.

Q. You are a fast freight line, practically, are you not ? A.
Yes, sir.

Q. And except that yours is a separate organization, it does
not differ materially from the fast freight liues that are organ-
ized under the co-operative plan, does it ? A. No, sir.

Q. Yours is the only non-co-operative fast fi-eight line now
running on railways out of New York ? A. I could not tell
you as to that of my own personal knowledge ; I have no
knowledge on the subbject.

Q. Has the stock interest changed within the past four
years ? A. No, sir.

Q. Is it the same as it was ? A. Yes, sir.

The Chaieman — W^hat do you mean ; the ownership ?

Mr. Stebne— Yes, sir.

748

By Mr. Steene :

Q. Has there been no transfers of stock in the last four
years on your books ? A. No, sir ; not to any extent, to my
knowledge.

Q. You don't recollect who the stockholders of your organiza-
tion are, do you ? A. I could not remember them all.

Q. Can you tell us how much money yon received from the
New York Central & Hudson River Railroad Co. during the
year 1876, for trackage and commissions ? A. I could not,
here.

Q. Could you as to the year 1877 ? A. I couM not without
going to the books.

Q. Could you as to the year 1878 ? A. I could not.

Q. You feel yourself authorized to make special contracts,
do you not ? A. With whom ?

Q. With shippers? A. No, sir; we have nothing to do with
it ; we have no authority to make special contracts or special
rates.

Q. Haven't you ? A. No, sir ; the rates are furnished us
from day to day by the railroad companies.

Q. When special contracts or special rates are made by the
Merchants Despatch Transportation Co., are they always made
under the authority of the New York Central Railroad. A.
So far as I know.

Q. In each jjarticular case ? A. Yes, sir.

Q. Let me draw your attention to some entries in this book,

for instance A. I will state that I know very little about

the rates or the daily -business of the concern ; I have nothing
to do with that, and know nothing about it, in fact.

Q. For instance, here are three contrMcts made June 28th,
by the Merchants Despatch Transportation Co. for Cincinnati,
to run to June 1st, 1877, from June, 1876 — yearly contracts,
evidently — one made to one house at thirty, first class ; an-
other forty, first class; again thirty, first class ; do you mean to
say in each of these instances you had special authority from
Mr. Rutter, or some one connected with the New York Central?
A. I will say, I know nothing about those contracts in any way,
shape or manner, and never heard of them until you read them
off there.

Q. You have no charge of that part of the business? A.
No, sir.

749

Q. That is done by the freight agent ? A. I only know
generally, that the Merchants Despatch Transportation Co.
have no authority to make rates except by the authority of the
roads from day to day.

Q. Don't .they make rates and get the authority subse-
quently ? A- No, sir ; no right to do it.

Q. Then you think that in all these instances, amounting to
thousands of them in the course of the year 1876, the consent
of one of the officers of the New York Central is first ob-
tained? A. Tes, Sir,

Q. In every case ? A. Yes, sir, in every case, without any
doubt.

Q. Before the contract was made ? A. Yes, sir.

Q. You receive vouchers for rebates and drawbacks, don't
you, under these contracts ? A. That I could not tell you ;
I don't know ; I don't know enough about the system of the
accounts to tell you really.

Q. How much of your time is occupied by the Merchants
Despatch Transportation Company business?

Mr. Cole — That I object to.

Q. Do you keep any books, or have you any active work to
to attend to in connection with the Merchants Despatch Trans-
portation Company?

Mr. Cole — I object.

The Chairman — I think the question is a proper one.

By Mr. Steene :

Q. (Question repeated). A. I keep no books.

Q. Is your time actively occupied by the work of the Mer-
chants Despatch Transportation Company? A. A couple of
hours a day ; it is my practice to go there in the morning at
ten, and stay until about twelve.

Q What financial transactions have they other than the
mere getting of freight and receiving rebates and drawbacks
and commissions from the company which handles the freight?

Mr. Cole — Transactions not connected with a road in this

State ?

Q. What financial transactions are there connected with the
Merchants Despatch Transportation Company other than the
things I have named ; are there any ? A. We have no trans-

750

actions with the roads of this State, except the payments of
our commissions and mileage.

Q. The commission represents the value of getting the busi-
ness ? A. Yes, sir.

Q. The mileage represents -what is supposed to be earned on
the cars? A. Yes, sir; the use of the cars.

Q. Therefore, if the company owned the cars, they would save
that mileage? A. They would, except the expense of main-
taining the original investment.

Q. The company furnishes the shops in which those cars
are repaired ? A. Yes, sir ; they get their pay for the repairs.

Q. They charge you the cost under your contract for those
repairs ? A. They charge us the cost of the labor and ma-
terial, and ten per cent.

Q. Ten per cent to represent the capital invested in the
shop ? A. To represent their other expenses, I suppose ; I
don't know what they assign it to.

Q. How much on the average does one of those cars earn?

Mr. Cole — Do you mean on the New York Central ?

Mr. Sterne — Yes, sir ; suppose a car runs from Chicago to
New York, what does it earn?

Mr. Cole — I object to it ; I don't object to his asking how
much it earns on the New York Central, but do as to what it
earns from Chicago to New York.

The Chaieman — ^Any earnings they make by virtue of the
New York Central as a corporation of this State.

Mr. Cole — If put in that shape I don't object.

The Witness — The cars earn three-fourths of a cent a mile,
whatever the distance run.

By Mr. Steene :

Q. And that is uniform, no matter where they are run ? A.
Yes, sir.

Q. A great deal of your stuff which you furnish to the New
York Central Railway is laden in cars of the New York
Central Railway ; you earn mileage on that, don't you, too? A.
No, sir; we have no mileage on any cars except our own.

Q. Don't they give you, practically, mileage whether your
cars run tlie miles or not on all your cars ? A. No, sir.

Q. How is the record kept of the mileage ? A. By a man

751

standing at the switch post and taldug ,i record when the cars
pass on the different roads of the couutry.

Q. Will you give the method by Avhich your mileage is
calculated and checked ? A. I could not, I don't understand
the system well enough to explain it,

Q. Who does? A. I only know as the cars pass from one
road to another the record is kept and reported to the different
roads, and reported to the general office of the Merchants
Despatch Transportation Company ; in that way they obtain
the mileage of each road.

Q. You have an office in the depot of the New York Central
& Hudson Eiver road? A. We have at St. -John's Park.

Q. What is done at that office? A. Merely signing the
receipts for the goods delivered there, and making the way
bills lor them, and loading them in the cars.

Q. Do the Merchants Despatch Transportation Company
make the way bills? A. They do.

Q. And they handle the goods themselves.? A. They do.

Q. What are they paid for handling the goods and making
the way bills ? A. They pay their own handling.

Q. Does the commission cover that? A. No, sir.

Q. Is there any special payment of expenses for that ? A.
No, sir ; not that I know of.

Q. That is done under your contract with the company ?
A. Yes, sir.

Q. We were informed that when the goods came into the
hands of the company, they were then the company's goods,
and they forwarded them; that is a mistake; you forward
them ? A. Which company do you refer to.

Q. The New York Central? A. They are put into the
possession of the New York Central to haul, certainly.

Q. But until the hairl begins ? A. They are handled by the
Merchants Despatch Transportation Company, and at their
expense, at St. John's Park.

Q. Those are generally first class goods going westward,
are they not ? A. They are all classes of goods.

Q. Westbound mainly ? A. Yes, sir.

Q. Do you handle grain coming eastward? A. We do.

Q. As jpuch as goods going westward? A. In tonnage,
■ larger,

752

Q. Have you ever made muj computation of how much it
costs to handle goods per ton ? A. I have not.

Q. You cannot tell this Committee how much it costs to
handle goods per ton ? A. I could not.

Q. Is there anybody connected with the Merchants Despatch
Transportation Company who can tell' that? A. Have you
reference to th« hauling or the mere loading of the goods.

Q. The terminal handling of the goods merely ? A. I
should Suppose it would cost about twenty-five cents a ton.

Q. Have you any means of telling this Committee, or any
data upon which you can give this Committee what the income
of your corporation was in 187G, 1877 and 1878, from the New
York Central and Hodsou Eiver road ? A. 1 could obtain
the information ; I have no means of giving it this morning.

Q. Will you give the Committee the information ? A. The
amount of earnings from the New York Central Kailfoad?

Q. Yes, sir? A. Yes, sii'.

Q. Have you any like contract with the Erie road? A.
' No, sir.

Q. (By the Chairman.) In furnishing that, will you specify
the source whence it comes — you get a certain part for mile-
age and a certain part for commissions? A. Yes, sir.

Q. In making your estimate of twenty-five cents a ton for
handling, have you reference to handling at both ends ? A.
No, sir.

Q. Handling only at one end? A. I want to say I don't
consider it an estimate ; I should suppose it might cost about
that ; I have no means of kjiowing actually the cost of it ; it
is mere guess work.

Q. You have men in jonr employ, haven't you, who handle
this freight and load it ? A. Yes, sir.

Q. And you have clerks who do the bookkeeping and way-
bill work ? A. Yes, sir.

Q. Do you know how much tonnage you handle in the
course of a year at St. John's Park ? A. We could tell by
reference to the book; I have no knowledge oE it.

Q. You can tell also how much the expenses were for porter
work and the work of booking ? A. Yes, sir. '

Q. And from that data this Committee could be informed as
to what the terminal expenses of handling are ? A. Yes, sir. '

753

Q. Will you also furnish the Committee this information?
A. I will, sir.

Mx. Sterne— Now, I call for the stock ledger, or a list of
the stockholders of that corporation ?

Mr. Cole — I object to fui'aishing that, and renew our offer
to furnish the Committee with all information conceruiug the
connection of the Merchants Despatch Transportation Com-
pany with any chartered railroad of this State, or with any of
the ofHcers, attaches, or any persons connected iu any way
with the chartered road.

The Chairman — By stating who those parties are and what
the arrangement is, perhaps it will cover all that we may de-
sire without definitely deciding the call that you now make.
Ask him and let him state who these parties are according to
his best recollection, and the amount of their interest.

Q. Who are the stockholders of your road connected with
any railway corporation of this State that you know of ? A.
The New York Central & Hudson River Railroad are the
largest stockholders ; the Lake Shore & Michigan Southern
and American Express companies own a large portion of the
stock in the concern.

By the Chairman :

Q. Tell us what proportion of the stock they own ? A. The
New York Central owns between twelve and thirteen thousand
shares, the American Express Company held about 6,500
shares, and the Lake Shore Eoad about 3,000 shares.

By Mr. Baker :

Q. What is the total number of shares, Mr. Eargo ? A. 30,-
OCO ; 27,000 issued.

By Mr. Cole :

Q. Give the rest of the railroads ? A. The Cleveland, Col-
umbus & Cincinnati road owns a thousand shares ; the Spring-
field & Cincinnati Short Line Road owns between four and
five hundred shares ; the Great Western Road of Canada, or
its representatives, own about one hundreil and fifty shares ; I
think that is it ; I don't remember.
83

754

By Mr. Steene :

Q. Do any individual stockholders, or .any individual direct-
ors or employes of the roads that you have named own any
stock?

Mr. Cole — I ask you to confine that to the New York Cen-
tral.

Q. New York Central Eailway ? A. Mr. William H. Van-
derbilt owns 20 shares ; Mr. William K. Vanderbilt 150, and
he holds, as Trustee, 160.

By the Chateman :

Q. As Trustee for whom ? A. 1 could not tell you.

By Mr. Stebne :

Q. Does Mr. Butter own any ? A. No, sir.

Q. Does otu- friend, Mr. Depew, own any ? A. No, sir, not
that I know of ; we should be very happy to have him for a
stockholder.

By Mr. Shipman :

Q. Does Mr. Simon Sterne own any ? A. Not registered as
a stockholder ; he may own in the name of Mrs. Hill or Brown,
or some lady.

By Mr. Bakee :

Q. Does your company make periodical statements of its
business, earnings and situation, to the stockholders ? A. No,
sir.

Q. Make it to anybody ? A. To the Board of Directors.

Q. It is furnished to the- stockholders, I suppose ? A. As
they may inquire about it.

By Mr. Sterne :

Q. Who else? A. T don't remember of any one else.

Q. What objection is there to giving the list of the stock-
holders? A. The general objection of making public the
business of private parties who would not care to have it
known that they are interested in an organization of this
character.

755

Q. Why sliouM they object to having it known that they are
stockholders in a respectable corporation ? A. Theobjpction is,
that theyare personally liable for all debts, or losses, or dam-
ages which may fall upon the organization.

Q. When does your contract with the New York Central and
Hudson River Eailroad expire ? A. In 1881, I think.

Q. Is there any prospect of renewing that contract? A.
There never has been any talk in reference to it.

Q. How does it come that the books of the organization are
in Cleveland? A. The General Manager's office is in Cleve-
land.

Q. Why should it be there more than here? A. It is more
central.

Q. Do you put on new cars annually on thf' other roads? A.
We don't put on cars on any particular road ; we parchnsecars
for the use of the business of the Merchants Despatch Trans-
l)ortation Company, and they run wherever that business may
happen to go ; they are not put on to any patticiilar road.

Q. Mr. Rutter has testified that you have not supplied any
new cars to replace the old ones since the contract was made?

A. The old ones have not been replaced ; they are still in
the service ; we have put on additional cars.

Q. Then, the business did not require you to furnish any
new cars since the contract was made ? A. ^es, sir ; we have
added to our number of cars ; we started with 600 and we have
to-day 3,400.

Q. Those 3,400 Mr. Rutter has not testified to having re-
ceived until the contract in 1871 ? A. The contract allows us
to put in as many cars as the business requires for the
service.

Q. Has your business increased or decreased since ? A.
Increased.

Q. And yet you don't add to your cars ? A. We have added
from 600 to 3,400.

Q. -Not since 1871 .'' A. Yes, sir; we commenced with 600,
and have to-day 3,400.

By the Chairman :

Q. The aggregate of the several shares that you named here
is about '24,009 or a little less ; I understand that the remaii:-
ing 6,000 are held by different individuals ? A. There are only

756

27,000 shares issued ; the capital is 30,000/ of which 27,000
only are issued, the remainder remains in the organization.

Q. llemains in the companj'? A. Yes, sir.

Q. And the company receives this dividend upon what re-
mains in it ? A. No, sir ; we have never gone into that ; we
have merely paid the dividends on the. stock issued.

Q. Then there would be about b,U00 scattered among indi-
viduals other than you have mentioned ? A. Yes, sir.

By Mr. Steene :

Q. How long has the New York Central owned these 12,000
shares ? A. Ever since 1871.

Q. Were they transferred from the treasury to the New
York Central Railway ? A. From the treasury of the Mer-
chants Despatch Transportation Company ?

Q. Yes, sir ? A. I think they were ; I won't be positive as
to that.

Q. Or were they transferred by private parties to the New
York Central ? A. I think they were transferred direct from
the Treasurer ; I will say there have been no transfers of stock
in the last five or six years to my knowledge.

By the Chaieman :
Q. You say the stock ledger is in Cleveland ? A. Yes, sir.

By Mr. Steene :

Q. Is it subject to your control ? A. No, sir ; it is in the
control of the Treasurer or Assistant Treasurer of the con-
cern.

Q. Could you not, as President of the association, require
him to produce it here, by virtue of your authority? A. No,
sir ; not without the Executive Committee or Board of Direc-
tors ordering it.

The Chairman — You cannot require the witness to do what
he cannot do, then, Mr. Sterne.

By the Chaieman :

Q. I understand the witness, that you have given the share-
holders officially connected with the railroads of this State in
any way, as far as you remember ? A. Yes, sir.

757

Q. Will you ascertain whether there are any more, and if
yon will, furnish them ? A. Stockholders in connection with
the roads of this State ?

Q. Yes, sir ; or officers, employes and attaches ? A. Yes,
sir ; if the Committee call for it.

The Chairman — I do not think it wise and proper to require
at this time the production of the stock ledger; I think with
this we ought to be reasonably content, unless there are some
future developments; ifanything in the future occurs to make
it desirable, we will entertain the proposition.

By the Chaikman :

Q. Mr. Fargo, let me ask yon ;.I und( rstand you to say that
the parties that you have mentioned here as owning stock,
have owned this same amoiint of stock for the last four years?
A. Yes, sir.

By Mr. Depew :

Q. You testified in response to Mr. Sterne's question that
the contracts over the Merchants Despatch were made entirely
by the officers of the New York Central Railroad ; did you
mean east as well as westbound? A. No; I was speaking
about westbound business ; with reference not to contracts but
the rates.

Q. In the eastbound business, the rates are fixed by the west-
ern railroads ? A. By the railroads in the west.

Q. In stating the terminal cost of handling goods at twenty-
five cents a ton, have you any data at all ? A. No ; I stated
distinctly, it was mere guess work.

William A. Cole was here called, but his examination was
suspended to permit Mr. A. E. Orr to be called, as his engage-
ments would not permit his detention.

Alexander E. Orr, being duly sworn, testifies as follows :

By Mr. Steknb :

Q. You are a member of the firm of David Dows & Co. ? A.
I am, sir.

Q. You have shipped large quantities of cereals, have you
not, both to this port, to Philadelphia and to Baltimore ? A

758

Not to Philadelphia, but to Baltimore and this port, from the
west.

Q. You have established a house in Baltimore, recently, have
you not ? A. Yes, sir.

Q. Since when liave you established a house there? A. In
the last two years.

Q. A considerable proportion of the grain trade that has
formerly centered in New York, has gone to Baltimore, has it
not? A. Yes, sir ; I should think a good deal has gone there.

Q. A good deal goes by way of Montrea. now, that did not
before, doesn't it ? A. Yes, sir.

Q. A considerable goes by way of Philadelphia that did not
go before ? A. That is so.

Q. The Baltimore & Ohio Railway Company has afforded, at
Baltimore, very large terminal facilities, has it not? A. It has,
it has built two or three elevators there.

Q. How long ago did it build these ? A. Within the last five
years — I am not exactly sure.

Q. Was it iully five years ago that they built them ? A. No,
I think they built one, and found the trade increasing, and
then they built another ; the larger one has been quite lately
built.

Q. How far are those elevators and terminal facilities from
the main depot of the Baltimore & Ohio Railroad ? A. They
are at the depot.

Q. I mean the receiving and discharging depot — the depot
of the Baltimore and Ohio Railway Company— is not it at the
water side ? A. I think it is, sir, the receiving depot.

Q. Was it, before thoy built those elevators.'' A. That I
cannot say ; I don't know ; but the receiving depot and the
shipping depot are all the same.

Q. Now the Camden depot is a large depot, is it ? A. I am
not familiar with Philadephia.

Q. No ; the Camden depot of the Baltimore and Ohio road ?
A. I think it is a depot for passengers ; I think not for goods
and freights.

Q. Do you know the depot for goods in Baltimore ? A. Yes,
sir ; I do ; I have been there several times.

Q. Corresponding to the St. John's Park depot of the N. Y.
Central road here ? A. The main depot, as I understand, of the
Baltimore & Ohio road, is at the same place where the grain

759

shipping depot is ; the steamers arrive at the docks there, and
the ^oods are put on board the cars from the steamers at that
place.

Q. Locust Point ? A. Yes, sir.

Q. Are you familiar with the Philadelphia terminal facilities?
A. No, sir ; I have not been at them.

Q. How long is it since the Hudson Elver & Central Eail-
road afforded the same facilities? A. I think since they built
the elevator at Sixty-fifth street, in that neighborhood.

Q. That is about three months, isn't it ? A. Yes, sir — oh,
no ; not three months ; I think a year and a half ; they have
added another elevator within the last three months.

Q. But the old elevator, some one told us, was not intended
to work? A. I never knew that; we have been working at it
ever since it was built, and have found it a great addition to the
terminal facilities.

Q. Do you still maintain your agency at Baltimore ? A. Yes,
sir ; we have a house there.

Q. Do you ship a large proportion of your through goods
from Baltimore ? A. We are not what you call shippers ; a
great majority of our goods come consigned to us from the
west ; we are not shippers at all.

Q. You break bulk here ? A. Yes, sir.

Q. Do you get a large proportion of your goods on through
bills of lading from the west ? A. How do you mean ; they
terminate here ?

Q. Don't you get a large proportion of your goods on through
bills of lading with the privilege of surrendering your -ocean
rate ? A. A very small proportion ; I should not think it would
be one per cent, of the volume of it.

Q. Don't you get those contracts from time to time, how-
ever ? A. If we make a sale to a person with that agreement
in it, then we give it to them, but that character of our busi-
ness is very small ; we are not shippers from here, but re-
ceivers of grain from the west — we receive western produce
and then sell to the shippers here.

Q. We have had here books of the N. Y. Central & Hudson
River E. E. Co., showing large sums of. money paid to you as
drawbacks and rebates on shipments of cereals ; those are by
previous contract, are they not ? A. I presume they are alFon

760

previous contracts ; but tlie great majority of those rontracts
are not made by us.

Q. Some of them are ? A. Yes, sir ; we make some con-
tracts that way.

Q. .And then you agree upon an agreed drawback to be paid ?
A. No; we do not.

Q. How does the voucher come into your bands ? A. When-
ever we make a shipment over any of these roads we have a
rate ; we know what we are going to pay just the sairie as we
would know what we are going to pay on an ocean steamer if
we were going to send stuff to Liverpool or Antwerp, and
when it comes to us, if it does not agree with tbe amount we
are to pay, there is a drawback made, and that is returned to
us.

Q. Is there not an agreed drawback ? A. No, sir.

Q. A drawback previously agreed upon ? A. There is no
drawback agreed upon ; there is a rate of shipment agreed on
where we make the rates ; for instance, if we have 5,000 bush-
els of grain in Chicago or St. Louis, or St. Paul, we find out
before we ship it what v(fe are going to pay for it ; if the bill
of lading comes to us at a different rate, we make what we call
a claim against the railroad for the difference of rate, and re-
ceive it.

Q. The book we had here showed large payments —
in one instance, $500 or more — on special shipments, as
an overcharge or drawback, or rebate, or whatever you
may choose to call it, as per agreement ; now, that would
be. Tinder the circumstances, giving a bill to you at one
rate; and really charging you another, would not it? A. Let
me explain to you ; we never make a shipment that it is not a
special shipment, if you mean by a special shipment that we
know what we are to pay for the transportation of the pro-
perty from the point of shipment to New York, or wherever it
is going to ; now, we cannot tell what that bill of lading will
be filled out at ; it comes to us and is very often different from
what W3 have agreed to pay, and we make a claim for the over-
charge ; now, 1 don't know whether you ca'l it rebate or not;
we call it an over payment.

Q. Then they bill it to you in all probability at what tliey
consider the schedule rate ? A. No ; they bill it to us at what

761

the bill of lading rate is, and we have got to pay for it before
we get the property.

Q. Then you refer to the special contract ? A. Then we
refer to the special contract— the rate we have made ;
every shipment is a special rate ; we don't know what we are
to pay to-day or to morrow ; what we are to pay is a specified
rate ; we never leave it to the railroad to decide what we will
pay.

Q. You pay no attention to the schedule ? A. I don't think
I ever saw a schedule ; I don't know anything about them ;
they are like the weather, I presume, if there are such things ;
we don't pay any attention to them.

Q. And the railroads do not pay any attention to them? A.
I don't know ; I don't know their business.

Q. So far as your experience is concerned, you get a special
rate whenever you want it ? A. No ; we ask what the rate is,
and if the rate suits us we ship the goods.

Q. You can make a special contract with the railway com-
pany for any amount you may ship whenever you want to ?
A. Tes, sir.

Q. With whom do you make the arrangement — with Mr.
Rutter or Mr. Mcllhauriey ? A. Oh, we try all the roads be-
fore we make the arrangement and see which is the cheapest.
Q. You apply to all ? A. Yes, sir.

Q. The question whether you ship through Philadelphia,
Baltimore or New York is determined by the rate ? A. Yes,
sir.

Q. How long is it since all shipments from the west, of grain
to the east, have been in that condition ? A. I have never
known it to be any other way ; it is the same way. by the
canals ; we always have a special rate.

Q. They have just organized a pool by which east bound
rates are to be fixed and determined as a definite rate ; do you
think that an advantage or a disadvantage ? A. As far as the
merchants are concerned they like stationary, at least, settled
rates ; they don't like to pay a rate to-day, and after they
have shipped all their property have somebody else ship
under them.

Q. Do you consider those fluctuations a serious damage to

business? A. Yes, sir.
Q. And that s6rious fluctuation in rates has been a detri-
84

762

ment to tlie business of New York ? A. It has at times been,
yes, sir ; if all the railroads could be controlled by one moving
spirit it would be better for business, but as long as they

are

Mr. Shipman— (Interiupting) What is that last reAark? A.
I say if all the railroads could be eoutrolled by one
moving spirit I think it woiald be better for trade, but
since they are under different organizations it would be impos-
sible to have a fixed rate ; a fixed rate would mean then to
those competing roads, notice what they were bound to do, and
the other roads terminating in other sea-board cities would
immediately make use of that.

By Mr. Stebne :

Q. How largely has the business of Baltimore increased in
exports of wheat or cereals ? A. The whole business of the
country has increased very largely; each year it is increasing.

Q. The ratio of Baltimore? A. The ratio of Baltimore
has increased siace it was made a shipping point ; after
the Ohio Railroad decided to be s carrier of grain and
gave the facilities there, then it immediately began to com-
pete with the other Atlantic seaboard termini for part of their
business ; it is the same way with Philadelphia.

Q. Do you pay for elevating in the port of New Torkf A.
We do ; yes, sir.

Q. There is an elevator charge ? A. No, there are different
ways ; there are a great many elevators besides the raiload
elevators.

Q. At the New Yofk Central elevator do you pay for
elevating ? A. I don't think we do.

Q. Do others ? A. I don't think they do ; that immediate
part of the business does not come under my supervision ; I
know that the shipper pays for elevators where it is transferred
from the canal boats to the ships; and they pay for elevating
into the store ; but I don't know whether the New York Central
elevator makes a special charge for that; I think it does not.

Q. I believe that is all I wish now, Mr. Orr. A. Perhaps it
is all you wish, but what 1 want to say is this, that we never
yet received from the railroads, any offer, and never asked
them for anything like what you call a special rate— that is,

763

something that nobody else got ; we never have had anything
of the kind ; our business is largely conducted in this \sray,
gentlemen; a shipper to a foreign port will come to us and
say — this is where we make a special rate — he will come
to us and say, " I have got an order for a large lot of corn
or grain, how can you fill it for us ?" we immediately set our-
selves at work, if we think it is possible for us to fill it, and we
find out what the cost of that will be at different points through-
out the west ; we then find out what the rate of freight will be,
and then we make the contract with him ; we make the sale to
him.

Q. When you go to these various offices in the western
towns, don't you, in point of fact, try to get the lowest possible
rate, taking into consideration the quantity you ship ? A.
The quantity we ship and the time in which it must be de-
livered are taken into consideration ; if the railroad says, " If
you don't want this inside of sixty days and will let us take
our idle cars, whenever we have any, we will give it to you at
such a rate ; but if you say you must have it in New York to
ship by steamer on such a day, the price must be more to
you ;" all those elements must be taken into consideration.

Q. You don't try to find out whether anybody else has such
a rate ? A. No, sir.

Q. You don't care anything about it ? A. No, sir.

Q. You take it for such as it is ordinarily ? A. Yes, sir ;
and if it suits us, all right, we take it ; if not, we decline it ; but
when this drawback deviates from the rate agreed, we make
a claim for that, and it is paid back to us ; it goes through
a minipulation in the different offices, and probably in three
or four months afterwards we receive a check back.

By Mr. Shipman :

Q. How long have you been engaged in the grain business
in New York? A. I have been a member of the firm since
1861 ; the firm has been in business since 1825, I think.

Q. Have you been in the firm of David Dows since 1861 ?

A. Yes, sir.

Q. You have done a very heavy business during all that time,
haven't you ? A. Yes, sir.

Q. You have had occasion to be very familiar with the
grain trade in Philadelphia and Baltimore ? A. Yes, sir, we

764

keep the run of what the prices aro, for we have to compete
with them ; we are not in Philadelphia as shippers of grain or
as receivers of grain, but then we are famihar with what is
going on there and in Baltimore and in Boston and in Mon-
treal ; we mean to keep the run of all those places, because
they are competitors of New Yoik.

Q. Do you have an agency in Montreal ? A. No, sir.

Q. Do you in Philadelphia ? A. No, sir.

Q. In Boston ? A. No, sir.

Q. In Baltimore ? Yes, sir.

Q. Then your houses are in New York and Baltimore. A.
Yes ; and in Chicago also.

Q. How long have you had a house in Baltimore? A.
Two or three years.

Q. Since the railroad facilities were better? A. Yes, sir;
we examined them and found the railroads giving facilities
that they had not given before, and a great many of our peo-
ple were seeking that market, and we went down to take charge
of our property there.

Q. There has been very marked increase of terminal facilities
in Baltimore and Philadelphia during a few years ? A. Yes,
sir.

Q. The effect has been to draw a portion of the grain trade
there ? A. A very considerable portion, and sometimes it
draws even more than New York can draw ; for the same num-
ber of weeks the receipts will be very much larger than the re-
ceipts here.

Q. That is the inevitable result of a shorter roate and
terminal facilities ? A. It is the ioevitable result of cheaper
freight rates given by the railroads.

By Mr. Depew :

Q. Then, I understand you that your rate only applies to a
single shipment every time ? A. Entirely, sir ; we have no
such thing as a continuous shipment on a given rate at all.

Q. When you have a shipment to make,, you go around to
the shops and see where you can get the cheapest rate ? A.
Yes, sir ; because we have to compete with others who will do
the same thing.

Q. You take it over the cheapest railroad to the cheapest
port? A. Yes, sir.

765

Q. Then, a fixed specific scliedu'e rate to New York, not
variable by special contract— what effect would that have
upon New York as compared with other cities ? A. It would
be very disastrous to us ; if you have a fixed rate to New York,
and other railroads know it, there is nothing to prevent other
railroads from giving a rate lower than that fixed rate to New
York, and it will control the business.

Q. To other cities ? A. Yes, sir ; it is a point that requires
the most careful manipulation, because you would be surprised
to know the volume of business that a quarter or an eighth
of a cent, per bushel will turn from New York ; I was asked
one time by one of the members of this Committee — I mean
the Commitee represented by Mr. Sterne — to write an article
upon the fact that the preponderance of New York capital
would always continue to New York New York business, and
it is the most fatal fallacy that could be presented ; why, nat-
urally, idle capital, in our owd instance, is what compelled us
to go to Baltimore ; and I will tell you another thing, gentle-
men ; we have been compelled to open a house in Chicago, for
the reason that at this end we cannot make the same rates
with the railroads as at Chicago ; we find all the time that
parties doing this grain business in Chicago can make
better rates than we can here doing it in New York, and
nine times out of ten — I presume from eighty to ninety
per cent, of our business — the rates are made west ; yes, I
should think I am below it ; and we have been compelled
to open a house in Chicago, with the view of enabling
us to make competing rates with people in Chicago for
property to be sent to the seaborJ, and particularly coming
to New York ; I want to bring this matter very particularly
before you, gentlemeu, because it is a thing we have a great
interest in. We are merchants of New York — I mean this
question of discrimination against New York. I should like
just to bring your attention to it in this way. We received a
telegram one time from Chicago within the last year and a
hulf, saying, "We wish to ship you 200,010 bushels o! grain,"
and named the rate of advance. We answered back, " We will
take it." They answered l)ack, "We will ship it to Balti-
more." We said, "No; we want it to come to New Yoik."
They said they could not send it to New York, and the
reason was that the rate of transportation was a quarter

766

of a cent higher ; and we acceded to it, and it went to Balti-
more. I began to think afterward what was the loss to New
York growing out of that transaction. The New York portion
of the rate of freight was six cents per bushel. The fact of not
being able to bring it to New York deprived the laboring pop-
ulation of New York of something like $10,000 or $12,000 ;
now, that was not all, but it gave to Baltimore the cargoes of
six vessels that took grain, and deprived New York of it ; and
that is not all, bat when New York invites those vessels to re-
turn, having received the cargoes of grain from Baltimore,
they are induced to go to Baltimore, and take six other vessels
with them ; that thing is going on all the time, gentlemen.

By the Chaibman :

Q. Was this not- one of the subjects of the Comptroller's
or Auditor's report last winter ? A. Yes, sir ; I meutioned it
to the Auditor last year, when he came down here and asked
us relative to the canal tolls, and showing him one reason why
the canal tolls should be reduced as low as possible, was be-
cause we are having earnest competition.

By Mr. Blanchaed :

Q. These rates, that you received on special lots, may or
may not be the tariff rates ? A. I don't know whether they
are the tariff rates at all or not ; we could not tell ; if we are
wanting them in a great hurry we are willing to pay more ;
quite lately we shipped a large line of stuff, and we gave the
railroads time to fill their cars just as they were needed, and
they gave us one rate, while at the same time we gave a larger
order for a particular time of shipment, and paid another rate.

Q. Are you familiar with the fact that up to lb72, every
bushel of grain handled at Baltimore was actually handled in
a halt-bushel measure ? A. No, sir ; because Baltimore was
not a competitor of New York in those days, and . we didn't
know anything about it as a shipping point.

Q. That is probably the reason ? A- Yes, sir.

Q. If grain arrives at Baltimore, does the Baltimore & Ohio
road decline to deliver it to you except at Locust Point, and
through their elevators? A. That is the only way.

Q. If grain comes to New York to you, will the New York
Central deliter it to you either at their elevator or at some
point in the harbor ? A. When I say the New York Central, I

767

say all the roads connecting ; their means of delivery is the
most accommodating to the merchants that it is possible to
imagine.

Q. Do you know any city in the world where the railroad
companies contribute so miicli to the delivery of grain at mis-
cellaneous points, as in the city of New York ?

(Objected to.)

A. I am lamiliar with the terminal charges not only of tlie
cities here, but also the terminal charges in Europe and in
Great Britain ; and I think you are right in saying that the
conveniences are greater here than at any other point we know
of ; that is, almost anything we ask in reason, it is always
given.

By Mr. Sterne :

Q. Is the rate higher here ? A. No ; I think our terminal
charges here are a little lower here than any other point ; that
is, if you take the aggregate of them; I think they are a little
lower than they are at any other point.

By Mr. Blanchaed :

Q. And deliveries are ma'de at more points ? A. There is
another jDoint you want to look at and that is this ; take
Baltimore ; I think the terminal charges at Baltimore are a
little higher than New York ; the charge for insurance growing
out of the holding of grain there is such that it is impossible
to hold grain there; New York is ten times better; but con-
sidering the rapidity with whicli through shipments are
handled, and the low rate of freight to that point, Baltimore
has certainly drawn away from New York more than other
competing points.

Q. Will you be kind enough to give to the Committee a
statement of the business you have sent through your Balti-
more and New York house for the two years 1877 and 1878?
A. It would be an immense undertaking.

Q. I mean the business you have received, just the total in
bushels? A. I would mention this, that since this investiga-
tion occurred, we cannot do anything with the railroad, and al-
most three-fourths of our business has been with Baltimore,
where we have been dealing with shippers.

768

By Mr. Sterne :

Q. Whj is that'? A. I don't know; I suppose you have
frightened the railroads, and they won't talk to us at all.

Q. They won't give you any special contracts at all, will
they ? A. They won't name rates to us such as Baltimore will
name; I don't know what the reason is, but they must know
it ; but certainl}- Baltimore beats us.

By Mr. Blanchard :

Q. Will you furnish a statement of the percentage of your
whole business whieh you have done at Baltimore in grain
receipts for the two years 1877 and 1878? A. I will write
down to Baltimore and get it for you with great pleasure.

Mr. Depew : I don't want to occupy the time of this Committee,
but on this question of terminal facilities I would like to make a
statement if it will be accepted; the testimony would cumber the
record, and I can put it in shorter space ; it amounts to just
this : I think it will be admitted, as it has been admitted in
numerous publications of the Chamber of Commerce and the
Produce Exchange, that the municipal authorities and the
State authorities of the cities and states of Philadelphia and
Pennsylvania, and Baltimore and Maryland, and Boston and
Massachusetts, furnish freely every possible terminal facility at
those seapoits to bring the ship and railroad together without
charge to the railroad oc to the shipper ; every facihty is fur-
nished by way of privileges on the docks, free wharves, tracks
in the street, and all that is possible to be done ; now,
in this city it has been entirely different ; the muni-
cipal authorities of the city of New York have constantly been
driving steam up town. The Harlem E. R. Co., in its con-
nection with the New Haven E. E. Co., brought the whole
Eastern States to New York ; that formerly went to Centre
street. It has been driven by the municipal authorities to
Forty-second street. The Hudson Eiver Railroad formerly
went to Chambers, and it has been driven by the municipal
authorities up to Thirtieth street, and only after great labor
we got the privilege of running dummy engines down to St.
John's Park. Now, in order to provide these terminal facili-
ties and increase them, having been driven out of the center in
that way, the N. Y. Central E. E. Co. applied to the municipal,

769

authorities for the privilege of extending a pier out into the
water at Thirty-third street. We showed that it would
enormously increase the grain shipments to this port by a de-
crease of terminal expenses. The City authorities charged us
for the privilege of extending piers over unused water which
was twenty or thirty feet deep, a rental of $5,000 a year,
we to pay taxes on the structure, and at the end of the lease, the
whole structure to revert to the City as its absolute property.
We applied to them for similar privileges at Sixty-fifth street,
and they imposed upon us there a reutid of $5,000 a year, and
$2,500 a year for each pier that we put out iiito the river, for
the land under water that was covered by it, gradually in-
creasing until the termination of the lease, and at the termina-
tion of the lease the whole pier and improvements to revert to
the city ; the same thing occurred at Fifty-ninth street, and
upon all these we paid taxes ; the same thing occurred at the
piers at the foot of Broad street, four, five and six; we rented
them from the city at a large rental, and when we wished to
widen them out we had to pay an additional rental for the land
under water, which would be covered by the widening of the
pier, though that land was there free, and there was no possi-
bility of its being covered ; so that every possible facility that
New. York possesses around its waterfront that can be utihzed
by the railroads terminating here for the purpose of cheapening
terminal facilities at this port, although it yields no revenue
and is absolutely useless to the city — when the railroads offer
to utihze it and pay enormous rentals for that purpose ; they
have to pay the same rental as if it was already improved, and
it reverts back again after a short period to the city ; after we
had established these depots at different centres so as to reach
and make ooovenient and cheap the land carriage at different
places, then a privilege, by the combined efforts of the mer-
chants and railroad was secured from the Common Council,
after we had gone to all this expense down town, to run our
freight cars upon the tracks of the Belt horse railroad around
the City ; that was restricted, however, to the Ninth Avenue,
and we were to make a contract with that company if we could,
and were restricted to running those cars at particular times,
and at no time to run them except at night, and after traffic
had ceased practically on those streets ; all those are mattex-s
of record ; I subwit those as facts, unless they a,re disputed.
85

770

Mr. NoYES— Who owns the land under water, the city or
the state ?

Mr. Depew — The land under water in the city of New York
formerly belonged to the state, but in lb71 the state granted
to the city the water front around the city, for the purpose of
commerce.

Mr. Stekne — A belt of four hundred feet was granted from
the state to the city, by deed.

William A. Cole sworn :

Q. Of what firm are you a member A. The firm of W. A.
Wilcox & Co.

Q. What is your business ? A. Refiners of lard.

Q. You are large shippers over all the lines of rail from the
west ? A. No, sir ; I am sorry to say we are not.

Q. You were formerly President of the Produce Exchange ?
A. Yes, sir; over ce:ftain portions we are large shippers, and
over others we scarcely ship anything.

Q. You make special contracts whenever you make ship-
ments ? A. I make the best rate I can get.

Q. Do you pay any attention to schedule rates in making
shipments ? A. Occasionally.

Q. Very rarely, I suppose ? A. I should say every day or
two ; I keep posted relating to the freights from various
points.

Q. You make, you say; the best terms yoa can with the rail-
roads ? A. Yes, sir ; after a pool has been effected I gen-
erally make better rates than before ; as soon as I see a pool
has been formed then I know I can probably do better within
a week than before.

Q. That is to say because railways do not observe their
pooling arrangements ? A. I suppose so.

Q. You have noticed considerable diversion of trade from
the port of New York ? A. I have, sir.

Q. To what do you attribute it? A. I attribute it almost
in part to the utilization of the advantages ■ of other cities ;
Baltimore utilized the advantages which she possessed, but
she did not prior to 1871 ; that is also true of Philadelphia
and Boston ; I should say — my observation of that would be
-^that that is about one-half the number of reasons ; I think

771

the other half would be attributable to this fact of through
rates to the other side and special rates to this city ; it is
equally divided, I should say, between utilizing the natural
advantages of other cities and discriminations in favor of very
few, and very low rates on throiigh shipments abroad ; I think
that will embrace it.

Q. And yet you have those low rates? A. No, sir; I only
judge by results ; I should say from probably four or five
western points I have low rates ; from Chicago and some other
points, I have high rates ; I think that the royalty which I
pay to the merchants who have favorable rates is decidedly
greater tha,n those I receive in the way of drawbacks.

Q. You are placed as much at a disadvantage as you are at
an advantage ? A. Greater, I think.

Q. You think, as a merchant, having schedule rates which
are adhered to is better than having demoralized special rates ?
A. I should say in that connection that I regard railroading, from
what little knowledge I have of it, a§ very like a business
matter ; that it is a better principle to have a uniform price to the
little and to the great than to have a price special to each man ;
I don't propose to subsidize a great merchant ; I think he is
already abundantly subsidized, and he gets very rich and then
becomes rather conservative, and he is not the medium which
I desire to use, as a rule ; five years ago, a man, who was my
smallest shipper, is now my largest shipper ; I regard this dis-
crimination as just as injurious to the railroads as it is to the
city ; I think they create a monopoly, which, in the end really
injures themselves ; I think that n^ainly covers the ground of
your question ; I desire to say one thing more, if you will allow
me to ; I should say most unqualifiedly, from my observation,
particularly during the year I was connected with the Exchange
matters, that, were New York to-day allowed to receive goods
at the terminus of a railroad, the same as the railroads deliver-
to Boston, that she would add to her tonnage one-third ; I
went into that very carefully last year — the year ending in
Juxie— when I ceased to be President of the Exchange ; I think
it has been demoralizing to the capital of men of moderate
means, who were formerly very effective agents in the trans-
portation of goods to the continent; and they are to-day either
obliged to go to one, two or three men and pay the royalty or
buy the lard in Chicago ; it is almost a trite saying on 'Change,

that we are going to drive this business to tlie other end, and
I attribute that to the local production of the packers in the
Eastern States ; but for that I would be in Chicago with a
three hundred thousand tierce business; we ship twenty-five
per cent, of all the lard shipped out of the United States.

Bj Mr. Shipman :

Q. You said that that has been a demoralizing cause ? A. I
might explain that ; to Liverpool the carrying trade is almost all
done on the lowest kind of a rate through Boston, particularly
in lard and provisions ; there were probably thirty or forty very
active commercial houses here with their connections abroad;
each man knowing the wants of his correspondents, on the
t)ther side ; knowing his correspondent did not desire to have
a letter of credit in New York, that would cost him one, or
one-half of one per cent. ; those men have almost been driven
Irom that branch of the business, but they have been driven to
through shipments throligh Boston; it has been a benefit to
the consumers abroad ; he hks received a benefit, and we have
suffered.

Q. And shipm'^nts are made on through shipments from Bos-
ton, as low or lower than through New York? A. I have
known the time, in the last five years, when two hundred tierces
of lard, on a vessel, I think, going to Havre and Antwerp ; paid
only ten cents a hundred more than I paid to New York from
the same p^int; I put on two thousand tierces, and a gentle-
men put on two hundred, and if that had continued, he would
have put on the two thousand two years hence, and I would
have put on the two hundred ; that came from New York ; the
point 1 want to make is, if the railroads would give the New York
merchant the same rate that they to a through shipper. New
York will avail herself of it ; I say that now, not only desiring
to help myself, but to help New York and the railroads them-
selves ; I cannot see why there should be any antagonism
there.

By Mr. Depew :

Q. Did I understand you that when you make a shipment of
lard from Chicago, you cannot get the same rate as other
people ? A. I have not, sir ; more than one in twelve ; I have

773

my own agent in Chicago ; I have not shipped any lard for my
owu use ; I think not over one thousand tierces in the last
eight months ; in the month of November, 187i', we shipped
ten or twelve thousand in one month.

Q. There are five different lines ? A. I presume so.

Q. They are all competing with one another ? A. Yes, sir.

Q. Then, how do you account for the fact that one person
can go around to those lines, and all competing for business,
and you cannot get it from one line or another as low as another
man can? A. There are two reasons I can give; first, our
agent is not alive ; he has our confidence ; and another reason
is, they desire to help another gentleman more than us.

Q. Then your agent has not business capacity ? A. I don't
say that; you do ; you may think so, but I don't.

Q. Certainly, if a neigiibor alongside of you could go to the
New York Central — that is to the western terminus of the New
York Central, as we call it, of this line — and get a certain rate,
and then take it to the Pennsylvania Road and get a less rate,
and then take that to the Erie and get a still less rate, and then
to the Baltimore and get a smaller rate still, and then take it
back to the New York Central and they say, "we will ship as low
as anybody" — if your neighborcando that and your man cannot,
then your agent does not understand his business ? A. I don't
know that ; assume a large ])acker in Chicago, who ships his
bacon and lard ; I would ship, possibly, in six months fifty
thousand packages ; he, with his bacon and pork, would ship
two hundred thousand packages, and I have been compelled
to buy my stock of just that man in New York.

Q. But here is a rate changing every fifteen minutes in
Chicago? A. Special rates are, sometimes.

Q. Any man there, who has got one hundred thousand
tier(!es of lard to ship to New York, he goes from one place to
another andgets a special rate? A. No ; I beg your pardon the
general rate is talked about as the rate of the day they all give
him; sometimes that obtains for two or three months; and
underneath that they are cutting down fifteen or twenty cerits ;
I know at one time the current rate was forty cents ; I made
an effort here and at the other end to get it for less ; I had
faith in my man's ability ; there was a long rate made for
twenty-five cents, running through some two months, I think.

774

Q. Then, as I understand you, when there is a cut rate at
Chicago, it changes every hour ? A. I don't say that.

Q. When the railroads are at war, as they are most of the
time out West, and there is a cut rate at Chicago changing
with every shipment, and the railroads are all competing with
each other to get all the freights they can away from each
other, 'without regard to rates, your man in Chicago cannot
get as low rates as other people at the same time ? A. A few
other people; yes, sir ; but two-thirds of the merchants on the
Produce Exchange are in the same position as I am ; six or
eight are not, and that is the point I am making ; that is what
is in this testimony ; that is what you will find by consulting
this book.

Q. Now, you say that it would benefit New York immensely
if through shipments were entirely abolished ? A. I do not
say so.

Q. That is what I understood you; if they ship to New
York ? A. No ; I said if the New York shipper had the priv-
ilege of taking his lard or bacon or grain at his terminus, as
you deliver it in Boston at the vessel, that he would be the
medium through which you would work in five years ; two-
thirds would go through the local houses at New York, French
and German shippers to the Continent ; if the railroads will
agree with me to-day to give me the lowest cut rate on through
freight to Jersey City, I will take my stock to Jersey City, and
I will probably add to my business two hundred thousand
tierces a year.

Q. Instead of shipping to Europe ? A. My customer may
want to ship it on a saiHng vessel ; this through rate of busi-
ness makes it obligatory sometimes, and it runs in a regular
line ; you want to favor a line of steamers to the detriment
of other ships.

Q. Suppose this through rate of shipment from the west to
all European points for these breadstuffs and products are con-
tinued through other cities and abandoned in New York, what
would be the effect ? A. Were I the arbiter of this matter, I
should certainly advocate through rates to whoever wanted
them ; I should certainly allow my own citizens the same
privileges as are given to the foreigner.

Q. Then, I undei'stand you to say you would abandon this
system at New York, whether it continued at other cities or

775

not- the system of through rates ? A. Certainly not ; I would
continue that, but in arldition to that I would give the New
York merchant or the foreign house in New York, the privilege
of taking their goods up to the Erie Railroad, and letting them
make their own arrangement for shipment.

Q. In other words, you would give him the option of
abandoning his through bill of lading and breaking his shipment
at New York ? A. Yes, sir ; certainly.

Q. If there were fixed schedule rates from New York to
Chicago for all people alike, and the railroads i unning from
Philadelphia, Boston and Baltimore were unrestricted as to
cuts, would that benefit New York ? A. It would depend upon
the sagacity and goaheadativeness of the New York merchants.

Q. Do you think the New York merchants could overcome
the fixed schedule rates with Boston, Philadelphia and Balti-
more ? A. A few of us have remained here and lived.

Q. And were constantly cutting under? A. Yes, sir ; a few
of us have lived notwithstanding; I have given the reason why
I have continued ; and I- am not spe iking of this in any way
antngouistio to a railroad or to a railroad interest ; I think
their interests are identical ; I only hope to see a fixed rate
brought about; I think they are bringing their goods low enough;
the average merchant would be willing to pay a larger rate
than he is paying to-day, but when A is being made and B
and C, and the rest of the alphabet are being pulled down,
then I think you are striking at the very root of all this evil.

By Mr. Shipman :

Q. Now suppose there was a fixed rate on all the Trunk
lines coming from Chicago, delivering grain and lard and bacon
to New York ; it was fixed and everybody had that rate and it
was known ; the Pennsylvania and Baltimore & Ohio roads
immediately adopt a lower rate, and a considerable lower rate ;
what would be the effect of that ? A. The effect of that, of
course, would be to drive trade there until they received all
they could take care of; all these things bring about their own
cure ; I hold you are not curing it well by demoralizing your
own citizens; and let me say here, the very day the railroad or
railroads drive, in this way, local trade Irom New York to the
wpst, instead of employing two roadg to bring these goods to

776

New York, they will send a man to Chicago and "he will have
five roads to choose from, and then you have a harder fight;
it is putting off the day of judgment ; had I gone to Chicago
in 1873, as I was told I bad to, the western goods which I
got in New York, I would then have bought in Chicago, and
I woulil have sent all my Brem an goods through Baltimore,
all my Liverpool goods through Boston— some through New
York, perhaps, and been laughed at by the merchants here ; it
seems to me that the railroads should foster the New York
trade ; I don't ask them to spend money in giving me my goods
around the harbor, but give them to me in the same place they
give them to theforeigaer— at the dock ; I^villtake my chances
then.

By Mk. Sterne :

Q. Do they do that in Boston ? A. I don't know ; I am not
familiar with it; there is another thing ; there was a discrimi-
nation made against the local trade in the pooling arrange-
ment ; the loctd trade in New Yoi-k when this poolinc; was
commenced, made New York a large distributing point of
cereals and provisions for foreign use, and that you have actu-
alh', in many eases, driven away.

Q. Where has that gone to '? A. It has gone west because
they cannot get the through shipment ; the bacon business
has almost entirely gone from them, west, because they could
get a through shipment very much cheaper than they could
any other way.

Q. Then the through shipment is lower than the local rate
phis the ocean rate? A. Yes, sir; what I have held for the
last three yeafs ; give the New York merchants at least the
same chance as the foreign merchants, or the gentlemen
engaged in the foreign trade, and I will warrant not only New
York will have a larger tonnage, but that the railroads will
have a very much better business.

Q. How mach is the through shipment lower than the

A. (Interrupting.) I have known it, as I told you, where they
are competing, where they only charged ten cents for

ocean carriage ; at that time it was very much larger

ocean carriage ; Of course theso facts have been gathered
from very mxny sources and from interviews witli merchants,
when I have been abroad, and I am satisfied that at times

777

lard and bacon liave been carried from Chicago to Liverpool
for less money than they would carry them to Brooklyn.

Q. To what point? A. To Liverpool.

Q. Through what ports ? A. Through Boston ; I don't
state that as a fact occurring every day, but as an isolated
case ; but to those two causes, which I first stated — a through
shipment at a lower rate than you can get landed in New
York, doing away with all port charges and a discrimination in
favor of A, B and C.

Q. How do the port charges in New York on provisions
compare with port charges elsewhere? A. The port charges
are higher, of course ; that is another abuse.

Q. Higher in New York than in Boston? A. Yes, sir.

Q. Higher in New York than in Baltimore? A. I think so,
sir.

By Mr. Blanohabd :

Q. You refer to port charges that are outside of the control
of the railroad companie.s ? A. In the delivery of goods, I
speak of.

Q. In answer to Mr. Sterne ? A. I mean port charges over
which the railroads have no control.

Q. Now, are you familiar with "the pending discussion, pro-
posing certain pools from the western cities ? A. Keally, sir,
I have had so little faith in these pooling arrangements and
the assurance of Mr. Fink that things were really fixed this
time, that really I have not read it.

Q. You have been assured that they would be fixed ? A.
Yes, sir.

Q. Let me put a hypothetical case ; assume these pools
were fixed, and the rate on provisions from Chicago to New
York was thirty cents, and thirty cents from Chicago to Bos-
ton, and twenty-eight cents from Chicago to Philadelphia, and
twentj'-seven cents from Chicago to Baltimore ; do you believe
the provision trade will mainly come through New York and go
abroad ? A. I will say yes ; of course it is a matter of opinion ;
I should say if you make a fixed price — fixed alike on the basis
of through shipments — so much a mile for the tonnage — and
assuming that you, on a through bill of lading would fix a rate
of twenty cents, say to the Erie dock, and the ocean freightage
ten cents, which makes thirty cents, that you would give the

778

New York merchant a rate of twenty centsat your dock, every-
thing else being even.

Q. No ; I will ask you that aftewards; but assuming you want
goods consigned by your house at Chicago to Wilcox & Co., at
New York, Philadelphia, Boston and Baltimore, and the trans-
action termiuates there, leaving the ocean freight entirely out
of the question, can New York hold its own? A. I should say
it could.

Mr. Stekne :

Q. Have you paid attention to the poohng terms ? A. Mr.
Blaachard msutioned certain fixed rates ; I did not catch the
question.

By Mr. Blanchakd :

Q. Let me state ib again; leaving the ocean entirely out
of the case, and assuming that every transaction terminates
at the seaboard, and the rate was fixed, under the pool, from
Chicago to New York at thirty cents, from Chicago to Boston
at thirty cents, from Chicago to Philadelphia at twenty-
eight cents, and from Ciiicago to Baltimore at twenty-seven
cents, what would be the effect on the commerce of New
York, and can New York hold its own ? A. I should say it
could hold its own ; but you would probably have to expend
a little more vitality and more brain power than the people of
Philadelphia and Baltimore would ; you would have to nip all
the corners off pretty closely.

Q. You think that would be entirely fair? A. No, sir; I
have talked with Mr. Rutter and Mr. Blanchard, claiming that
the New York Central and Erie roads, having a large local
business, could afford to compete with the Baltimore & Ohio
road, and with the Pennsylvania road ; now, if they can, why
not do it ? Every time you drive a man from Chicago to New
York, you are getting one more man to paddle your canoe ;
one more friend to help you ; you had to divide in five parts ;
you have it in two or three now.

Q. Assuming that those rates, under a pool, were inflexibly
charged from Chicago to each of these three cities, and were
then added to the ocean rates, so that you had precisely the
same terms between Chicago and Jersey City as the man who
exported through Jersey City from Chicago to Liverpool ; then

779

do you thint New Tork would hold its own ? A. I will speak
for myself ; I could hold my own.

Q. Do you know that that has been the object of all the
pools that have been discussed ? A. I don't know ; it seems
to me that the object of the pooling was a very fair object at
the start, but it ended the other way ; if a pool is carried out I
can certainly live on a discrimination of two cents, when I have
had fifteen cents against me.

Q. You have referred to a conversation with me ; have I not
stated to you that New York roads were endeavoring to get
the Grand Trunk to stop the use of through bills of lading from
western cities to European ports ? A. I will say that Mr.
Blanchard agreed with me in nearly all these particulars, as I
understand them ; he stated he thought it better for them, if
this thing could be brought about ; that he wished there was
not a through bill of lading made, or a special rate on a through
fhipipent, but let people attend to their own business.

Q. Did I say at the same time that as long as the Grand
Trauk insisted upon giving through bills of lading from Mon-
treal to Quebec and Portland, that it was a question full of
difficulties that was then being discussed? A. Yes, sir ; I think
you did ; Montreal does not affect the continental business with
which I am connected particularly, as it does the Liverpool
business; it strikes me if the railroads to-day would strike off
this through bill business to the continent, it would be better;
you must remember that England was formerly the great dis-
tributing point for the continent; England is not to-day; it is
not the market it was ten years ago ; the continanlal people are
buying, themselves ; I have every day letters from the interior
of Germany asking me to make direct shipments to them ; I
have letters almost weekly wanting to know how the corn crop
is that has been planted about six weeks ; that will show the
interest they take and how they acknowledge their allegiance
to the United States merchants ; I might say that there has
been a growing feeling, and it has been advertised, that New
York was nowhere and Chicago was the center of the universe,
and that you must go there for all your bread and butter and
bacon, and the railroads have helped it out as far as I can see
about as far as it was in their power ; and I would sny this
further, and I hope that it will not be forgotten— could I make

780

another allusion to my own business because it serves to illus-
trate this so well.

Q. Yes? A. To-day I cannot place, on the other side as
many goods or place them as well if I should send a man there
or subsidize a merchant, giving him control of my business, as
I could to leave my market open and sell to everybody at a fixed
rate ; as I said before, each house here has its own house
there ; it has its brother or its cousin, and he will do that busi-
ness very cheaply ; he will cut off all the little corners, and
there is more money left for the party or shipper here, than
for the party who makes this through shipment, and who ac-
tually has a lower rate ; I mean in the subdivision of the labor;
the subdivision of interests.

By Mr. Steene :

Q. The house rent in Baltimore is more than it is in New
York ? A. I presume it is.

Q. Rent for a store is lower there than it is in New York —
a store such as 70U occupy ? A. I presume it is.

Q. Assuming the terminal facilities to be the same in Balti-
more as in New York, and the ocean rates the same, why isn't
three cents per hundred a large discrimination against New
York ? A. I should think it would be large, but I should
think New York could live ; they could certainly live better
now if that was fixed ; I base my answer upon that.

Q. Then your answer does not mean that you approve of
that discrimination? A. I think it is better than what we
have had — very much better.

By Mr. Blanchaed :

, Q. Do you think the New York roads should equalize Balti-
more house rent ? A. I would answer in this way : Very many
things must be taken into consideration in answerinig that
question ; if I refined three hundred thousand tierces of lard, I
could pay more rent than if I was refining one hundred thou-
sand ; I think that the advantage New York has would fully
compensate for very many of the cheap things of other cities.

By Mr. Steene :

Q. Should not the volume of its business, and the superior

781

gradient of the New York Central Eailway, equalize the
shorter distance to Baltimore ? A. I am only giving you the
authority of Mr. Eutter, as to what he thought he could do.

Q. You did not state what Mr. Euttei' said? A. He spoke
merely in a general way, claiming that the New York Central
Eaih-oad, owing to its local travel, and greater advantages and
low level — they have togo over no hills and down valleys — that
they could more than compete with the Baltimore & Ohio road.

By Mr. Blanchabd :

Q. That is your opinion, is it not ? A. That is my opinion
now, and I base it on the remark of Mr. Eutter.

Herman Brock, sworn, testified as follows :

By Mr. Sterne :

Q. What is your business ? A. I am an exporter and dealer
in lard and bacon, and provisions.

Q. Do 3'ou remember a special instance when you were
charged for the same shipment — I mean for the same amount
of shipment from the same point, going on the same 'day, to the
same point — a different rate from a brother merchant of your.s,
here, in the City of New York? A. If you refer to the statement
that appeared last winter, I say I do, only I don't know what
rates the other party received ; I do not know the other parties'
business ; I only know that I got a bill for a lower rate than my
contract was.

Q. You got a special contract ? A. Yes, sir.

Q. On how many tierces of lard ? A. 250 tierces.

Q. How many car loads ? A. Fifty tierces to a car.

Q. Fi^e car loads ? A. The shipment was 3,000 tierces, but
250 tierces were shipped that day.

Q. This was on what road? A. The New York Central, if I
remember right.

Q. It came from where ? A. From Chicago.

Q. And then a bill was rendered to you lower than the
amount of your contract ? A. Yes, sir ; a little lower.

Q. How much lower ? A. It would amount to $24.50.

Q. What was done with that ? A. I don't know ; I paid so
much less, and I was very glad to do it.

782

Q. Were you informed by the railway as to how that mistake
arose ? A. Never.

Q. Did you know anything about whether that was a ship-
ment intended for Armour, Plankington & Co. ? A. No ; that
was my lard; it was my mark on the tierces; it was my brand.

Q. So the shipment came to you billed $24.50 lower? A.
Than I expected to pay.

Q. Lower than the amount of your contract ? A. Yes, sir.

Q. Have you got that bill with you ? A. No.

Q. Had you any communication with Armour, Plankington
& Co. on the subject ? A. No ; only I know they sent a bill
to me, trying to collect the diflference ; they got my rate, and I
got their rate.

Q. And they tried to collect the difference from you ? A. Yes,
sir ; I told them they should try to collect from the railroad.

Q. That you would not. pay more than the amount of the
bill ? A. That of course I would not pay any more than the
railroad had put in a bill for. Allow me to add that I could only
agree with Mr. Cole in what he said-.

Q. How about this through rate business ? A. I think the
greatest cutting is done under the cover of through rates, as
Mr. Cole'explained, and New York is under a great discrimina-
tion with the rates from Chicago, and I never can get as
cheap a rate in New York as my broker can in Chicago, and he
never can get as cheap a rate as some of the great merchants
can get here — the packers and so on.

Q. You find a constant discrimination against your busi-
ness?' A. Yes.

Q. How does that affect your business? A. I have to buy
from the packers who have the rates here in New York ; it
drives the business into the hands of the packers in Chicago ;
they sell to the merchants here.

Q. You find you can buy cheaper here under their rates
than you can out there from them, making your own rates ?
A. Yes, sir.

Q. Does that have a tendency to drive the business that
you are in from the city ? A. It drives it all to the west.

By Mr. Depew :

Q. Do you know anything about the manner in which busi-
ness is conducted in -Chicago — the business of giving rates?

783

A. Yes, sir, a little ; I have been there two or three times for
a week on 'Change.

Q. Do you know how when rates are varying from time to
time in Chicago, and the different roads are competing for busi-
ness, how different rates are secured by the merchants ship-
ping east? A. Yes, sir; they go around trying to pick up the
cheapest.

Q. And they ship by the railroad that will send the goods
the cheapest? A. Yes, sir.

Q. And you say under such circumstances your broker
goes out with another broker, and he cannot get as cheap a
rate as the other broker? A. No; the packers send out them-
selves ; I have a broker and the packer sends out his clerk.

Q. You say your broker and the packer's clerk go out when
the railroads are competing, and ther-e is a cut rate and they
are getting all the business they can, no matter what the rate
may be, you say, and your broker cannot get the same rate as
the clerk can ? A. I have to assume so, because they send the
goods always cheaper here than we can bring them from the
west.

Q. It is a mere guess on your part? A. Yes.

Q. You cannot go to the lake where you ship by the lake
and canal for instance, and get as cheap a rate as another, I
suppose ? A. I don't know.

Q. Then, you really don't know whether your broker or the
clerk of a large packing house in Chicago, when there is tre-
mendous competition between five different railroads and
canal and lake, each trying to get what they can and to try to
take it for the lowest price at which they can get it ; you don't
know whether your broker or the clerk can get a better rate ?
A. I don't know for certain ; I cannot swear to it ; 1 never
know what rate other people make ; I only hear the talk on
'Change ; I only hear there is freight offered for twenty-five
cents, for instance, while I have to pay thirty ; I try to find
the man that gets it ; it is hard to find, but, afterwards, perhaps,
I see bills of lading where a lower rate is put on, but it is very
hard to get lower rates, except by a few people who have the
ability to get them ; it must be a special ability in a man to
get a better rate.

Q. It is really a question of snap and business tact ? A. I
don't_,know ; I should like to know how it is done, for I could

78 1

make more money if I did ; if I could get a lower rate than
other people, I conld make more money.

Q. Do you know whether this shipment of Armour & Co.
was made at the same time yours was ? A. I heard it left
the same day in Chicago.

Q. Was it the same amount ? A.. Yes, sir.

By Mr. Blanchard :

Q. I understand you to say this discrimination was practised,
if so, entirely by the Chicago roads ? A. "Well, the percentage
of the provision trade is so much in favor at Chicago that the
other cities don't amount to much.

Q. But when you say you cannot get so good a rate, you
meau at Chicago ? A. Yes, sir.

Q. Then, your testimony entirely relates to railroads outside
of this State ? A. Entirely ; yes.

Q. Did you ever make an application to a railroad in the
State, and fail to get as good rates as any one else ? A. I was
referred to Chicago every time ; I was told by the agent that I
could get a much better rate in Chicago.

Q. Then, the discrimination is not practised by the roads in
the State ? A. No ; they leave it to the Chicago agents.

By Mr. Steenb :

Q. From whom did you get your bill ? A. From the rail-
road here.

. Q. The New York Central, isn't it? A. My business is
inostly by the Pennsylvania.

Q. I mean in this particular instance ? A. Of course, it was
the New York Central ; it was either the Erie or New York
Central.

By Mr. Blanchard :

Q. What do you mean by your bill ? A. Freight bill.

Q. Of course, you get it from the road that delivers the
prperty? A. Yes, sir.

Q. And you got it from the road that received it ? A. Yes,
sir.

Q. Now, I understand you to say you cannot do the business
at New York, and it is sent to Chicago — that the business goes

785

to Chicago for the reason stated by Mr. Cole ? A. Yes, sir ; I
think so.

Q. Does that prevent the business, after it leaves Chicago,
going through New York ? A. If the road in New York is the
cheapest.

Q. Then this very condition of affairs that you refer to may
increase the bixsiuess of New York ? A. Of course ; as soon
as New York has more facilities than other places, or if it is
the cheapest route to Liverpool and Antwerp ; New York gets
the business where it is the cheapest.

Q. Then, if the sum of the rail and ocean rates is lower
through New York, although you may lose the business, it may
constitute an increase of business for the City of New York on
the whole? A. Yes, sir.

By the Chaikman :

Q. I understood you to say that you got this shipment of
lard cheaper than your contract price, and that another firm
made a claim upon you for that difference ? A. Yes, sir; they
told me that I had got their freight bill.

Q. They told you that you had got theirs and they yours ?
A. Yes, sir.

Q. And they wanted you to refund? A. Yes, sir ; to save
them the trouble of making a claim against the railroad.

Q. Which you declined ? A. Yes, sir.

Q. And that was the end of it? A. That was the end of it.

By Mr. Steene :

Q. What is the difference between the rates in consequence
of through shipments, as compared with the local rates plus
the steamer rates ? A. That varies very much ; sometimes it
is as much as as five per cent., I think, because they cut them.

Q. So they make a lower rate for land carriage and a lower
rate for freights by twenty-five per cent. ? A. They give a
rate to a continental port in Chicago ; no one can say how
much the freight is from Chicago to New York, and from New
York to the continental ports.

Q. It is twenty-five per cent, below what it would be, taidug
the rate from Chicago to New York, and then the ( cean freight
rate from New York to Liverpool ? A. It used to be very
often, and is very often considerably lower.
87

786

By Mr. Depew :

Q. In that special shipment that you speak of, when this
mistake occurred, were you shipping at that time by the
Pennsylvania road ? A. No ; that lot all went by the Erie
or New York Central.

Q. Were you shi]:iping generally by the Pennsylvauia road
at that time? A. Not at that time; before; the business I
did with the Pennsylvania road was mostly engaged by a
Chicago house, who were intimate with the Pennsylvania road.

Q. Did you make the contract with the Central road for
your shipment of lard yourself ? A. No.

Q. Was that made in Chicago ? A. Yes ; my broker made it.

Q. And made there with the Chicago road ; the contract
was made with your Chicago agent to New York ? A. My
broker made the contract ; he engaged the freight in Chicago
to New York.

Q. And the people who shipped it, Armour & Co., shipped
from Chicago too, at that rate ? A. I guess so.

Q. And the New York Central had nothing to do with it ?
A. No.

By Mr. Blanchaed :

Q. You have just testified to Mr. Sterne that the sum of the ■
rate from Chicago to New York, plus the ocean rate, has been
higher than the through rate from Chicago to Liverpool ; is
that so? A. Yes, sir.

Q. Do you know whether that difference existed on the land
or the ocean ? A. T have strong reason to think that; it was a
cutting of rates, because the brokers here were asking so many
shillings per ton, and if I figured that out in cents, and added
the freight from Chicago, I got a higher through rate than if I
took the one rate named, in Chicago.

Q. That is mere inference, is it ? A. Yes, sir.

Q. Are you a shipper of provisions from here to foreign
ports ? A. I ship to the Continent, not to Liverpool.

Q. Do you know if they always charge you the same price
as anybody else — ship brokers? A. I guess I get as low
rates.

Q. Do you think the steamships or sailing vessels ever quote
lower rates to the railroads than to the citizens of New York ?
A. I don't know.

787

Q. Then j-ou don't know whether this difference that you
complain of existed on the land or on the ocean '? A. No ; I
repeat that I only presume.

Mr. DuGUiD, Chairman of the Sub Committee lo examine
the Erie books in reference to special contracts, presented at
this juactai-e, the reparb of tlie .Sab-Oam.nirtee, and it was
marked " Exhibit 1, June 24, 1879."

James B. Turner, sworn, testified as follows :

By Mr. Sterne :

Q. What is your business ? A. Commission merchant.
Q. In what ? A. lu flour _ind grain.

Q. What is the name of your firm ? A. Isaac H. Eeade &
Co.

Q. Do you know something of this through rate business ?
A. Yes, sir; we ourselves have nothing to do with it, as we re-
ceive goods here and do not handle goods going through New
York; being com mission merchants, we receive grain and flour
from the west and sell them here ; we sell to exporters, that is
all.

Q. What eS'ect has the through rate business on your busi-
ness ? A. A detrimental effect, inasmuch as it takes a good
deal of stuff' past us that we would otherwise handle.

Q. Why ? A. Because they can get lower rates through to
Europe than they can get to New York, and then re-ship again
on the ocean.

Q. Do the New York railways make these through rates
from the west? A. Yes, sir.

Q. Do they make contracts for through rates here? A. I
don't know whether they do or not, not being in that line of
business.

Q. There is no handling of the goods here in the event of a
through bill? A. Not by any commission house here.

Q. It goes straight through New York? A. Yes, sir; it
goes straight through, and we never have any handling of it,
of course ; the railroad and steamship companies handle it.

Q. And it goes straight on ? A. Yes, sir.

The Chaihman — The examination of the witness, so far as it

788

affects his private business is of no materiality to this investi-
gation ; it does not make any difference to the people of the
State whether the railroads handle the freight here or the in-
dividuals.

[Eecess to 3 p. m.]

3 p. M.

J. E. A. Moore, being duly sworn, testified as follows :

By Mr. Steene :

Q. What is your business ? A. Milk business.

Q. How long have you been in that business ? A. Since
1863.

Q. Where is the milk that you sell here, produced? A. It is
produced in Dutchess County.

Q. Is that on the line of the Harlem road ? A. No, sir ; it
comes by way of the Dutchess & Columbia to the Hudson
River, and thence by the Hudson River to New York.

Q. What do you pay per can ? A. 60 cents per can ; a
cent and a half a quart.

Q. Do you still pay that price ? A. I paid it this morning
for a part of my milk.

Q. Did you pay formerly the same price ? A. Well, I have
paid it for a good many years.

Q. How long ? A. I think since 1864 ; somewhere about
1864 I think the price went up ; I ain't positive about that.

Q. Do you get cheese also ? A. No, sir.

Q. Do you get cream ? A. No, sir.

Q. Do you obtain milk through any other source than the
Hudson River Railroad ? A. I got this morning by the boat
part of my milk.

Q. What do you pay by boat? A. 40 cents per can; one
cent and a quarter per quart.

Q. Do you pay the milk producer the same for the milk
that you get by the boat at 40 cents a can, that you do when
you pay 6C cents a can by the railroad ? A. No, sir ; I wrote
them to the effect that I should pay them 15 cents a can more
now, those that ship by boat, than what I did — those that
sent by rail.

789

Q. S;j that the milk iirodneer receives the difference '^ A.
He does ; yes, sir.

Q. Between the rate of freight and the rate at which it
stands you under the reduced rate ? A. Yes, sir.

Q. Is milk lower in the market now than it was, to the pro-
ducer? A. Yes; it has been lower for tlie last — well, several
jflonths ; a couple of months, I should think.

Q. Did you get milk by express at any time ? A. I did ;
yes, sir.

Q. What express, and over what road ? A. The American
Express ; over the Hiidson River road from Peekskill.

Q. What did they charge you? A. They charged me 40
cents a cau for the first week.

Q. What did they charge you afterwards ? A. They brought
it for 40 cents a can for one week, and then they notified me
that it would be fifty cents the next night ; and they said the
railroad company had been after them, and would not allow
them to carry it unless they carried it at the same figures they
charged ; and they carried it two nights at fifty cents, and then
they notified me that it would be sixty ; I asked them if they
were going up ten cents every two days ; they said they did
not know ; they guessed they had got it as high as the railroad
then.

Q. The milk that came by express was that delivered at
your store ? A. Delivered at my office.

Q. And the milk that comes by the daily milk train over the
Hudson Eiver, you have to call tor ? A. We have to go to the
depot for, yes, sir — theii depot.

Q. Were the empty cans taken back by the express ? A.
They were ; yes, sir.

Q. You were treated the same as by rail by the express at
forty cents a can, except that you received the milk at the
door ? A. I was treated so much better ; yes, sir ; had it de-
livered at the door at 8 o'clock in the evening, instead of hav-
ing to go for it at two or three o'clock in the morning.

Q. Two or three o'clock in the morning at the depot ? A.

Yes, sir.

Q. Mr. Eutter has testified here that the milk is handled
there by two men ; do two men handle a can of milk ? A.
Well, I don't know where you mean ; by the company ?

Q. Yes ? A. No ; one man rolls the milk to the door ; one

790

man takes it out ; I take it out, or my men do ; one man rolls
it to the door.

Q. To the door of the milk car ? A. Yes, sir.

Q. Then yoa take it out ? A. We take it out of the car;
and set it on tlie platform, and roll it to our wagons ; I never
have seen but one man employed to each car.

Q. Can one man put it into a wagon alone ? A. Oh, yes.

Q. A can of milk ? A. Certainly.

Q. Have you ever handled a barrel of flour ? A. I have ;
yes, sir.

Q. Well, is a can of milk more readily handled than a
barrel of flour ? A. I should say it was ; yes, sir ; a great
deal.

By Mr. Depew :

Q. Are you a milk dealer ? A. Yes, sir.

Q. This milk . that you get ; how much do you pay the
Hudson River Railroad for that milk you get along the line of
the Dutchess ct Columbia ? A. I pay sixty cents a can.

Q. How much does the Dutchess & Columbia get? A. I
don't know what they get.

Q. Then you don't know that the New York Central charges
you precisely the same over its Ine as everybody else ^—forty-five
cents a can? A. I don't know anything about it ; I have heard
it to be the fact but I don't know it ; I get my bill of lading from
the Hudson River Railroad Company, and I don't know any-
thing aboat the other road, except that it comes that way.

Q. You do not know that the fifteen cents a can is the
amount allowed to the Dutchess & Columbia Railroad ? A. I
have heard it was ; I do.i't know it to be a fact otherwise
than what I have heard.

Q. Then if the Hudson River Railroad charges the Dutchess
& Columbia Raili'oad forty-five cents a can and everybody else
forty-five cents a can, they do what Mr. Sterne wants, don't
they — charge everybody alike ; don't they charge everybody
alike ? A. I don't know how that is.

Q. As a matter of fact, the Hudson River Railroad Company
charges forty-five cents a can to everybody, don't they ? A.
I don't know what they charge ; they charge me sixty.

Q. You do not know anything about the Dutchess and Col-
umbia Road ? A. Only from hearsay ; I heard that they got

791

fifteen, and the Hudson Kiver forty-five ; I get my bill of lad-
ing from the Hudson Eiver ; I don't know how they settle
their affairs with the Dutchess and Columbia road.

Q. You don't know, then, that the Hudson Eiver Eailroad
has to collect for both its own fieight and the Dutchess &
Columbia freight? A. I don't know ; no, sir; there never was
anything said to me about that ; I merely get my bill of lading
from them.

Q. You don't get your milk from any where, except on the
line of the Dutchess & Columbia road ? A. No, sir ; not at
present.

Q. The Dutchess & Columbia road ends at Fishkill on the
river, don't it ? A. I don't know ; Dutchess Junction they call it.

Q. It is on the river, is it not ? A. I believe so ; yes.

Q. And in order to induce those people from whom you buy
on the Dutchess & Columbia road, to ship by river instead
of by the Hudson Eiver Eailroad, you offer them seventy-five
cents of the difference, and you keep the other twenty-five ;
that is it, is it not ? A. The people on that road — the farmers
— I believe it is agreed to pay them two cents a quart for their
milk — that is, all farmers that are on through lines, where the
freight is forty-five cents ; and on branch roads where the
freight is extra, they have to suffer the difference in the price.

Q. Then, it is their misfortime in living on a branch road ?
A. It is their misfortune rather than ours that they live on
branch roads.

Q. Who makes this agreement with the farmer for two cents
and a cent and a half. A. I believe it was made between the
committee from the farmers and the committee from the milk-
men.

Q. Were you a member of that committee ? A. I was, yes,
sir.

Q. That entered into that arrangement? A. Yes, sir.

Q. Have you lowered the price of milk to the consumer in
New York since the first of May? We have to a certain ex-
tent.

Q. To what extent? A. Well, frem one to two cents a
quart mostly, as a general thing.

Q. Do you charge the same rate to everybody? A. No.

Q. What is your difi'erence ? Well, it varies from four to
eight cents, but there are very few that we get eight cents from.

792

Q. Why do you charge some people twice as much as others ?
A. Well, I will tell you ; we have got some customers that owe
us back bills, and we try to keep our price up to get our back
money if we can.

Q. Is that on the principle of the harness maker who had
a saddle stolen, and charged the saddle up to all his customers ?
A. I don't know, I am not in the harness making business ;
I am in the milk business ; there are very few customers that
we get eight cents from.

Q. You get all you can, don't you ? A. Well, no ; I could
get eight cents from most of my customers if I was to charge
it to them ; I give them the benefit of the reduction on milk,
as everything else has come down accordingly.

Q. Do you make any* difference between a man who is a
steady customer, and takes a large- amount every day, and a
fellow who hails a wagou and buys a quart? A. To large
consumers we make a difference.

Q. You give it to them at a less rate ? A. Yes, sir.

Q. Governed by regularity and the amount, to a certain ex-
tent ? A. To a certain extent ; yes, sir.

Q. When was it that you had this express arrangement ? A.
Last December, I think ; the 26th of December was the first I
had shipped by express.

Q. Last year? A. Yes— 1878.

Q. The Hudson Eiver & Harlem Roads charge now forty-
five cents to all customers, don't they ? A. I don't know what
they do charge, only from hearsay ; I know that they charge
me that ; they charge me sixty cents.

Q. You know better than that. A. know better than what?

Q. You know that part of that goes to the Dutchess &
Columbia Eoad ? A. Only from hearsay ; I get my bill of
lading from the Hudson River Railroad Co.; there is nothing
said in it about any other road.

Q. There is no bill of lading ; they present you a freight bill.
A. A freight bill, yes sir; there is nothing said about any other
road there.

Q. Does not that freight bill call for a point on the Dutchess
& Columbia to New York ? A. Yes, I think it does, but there
is no separate charge ; it is so many cans at so much, so much
amount.

793

Q. Then, the Hudson Eiver lias to adjust that charge with
the Dutchess & Columbia ? A. I suppose they do.

By Mr. Steene :

Q. Whei e is your milk route ? A. In New York.

Q. Where ia New York ? A. Well, it runs from Horatio
street to Seventy-seventh street, principally on the West side.

Q. Can no milk wagons pass over that route without your
couseut? A. Well, I presume there is a good many of them
without my consent.

Q. Have you got a charter from the State of New York ? A.
No, sir.

Q. Have you ever got any State aid for your business ? A.
No sir.

Q. Any county aid for your business ? A. No, sir.

Q. Have you got a monoply of the road ? A. No, sir.

Q. Did you ever exercise the right of eminent domain ? A.
No, sir.

Q. Did you buy your horse in the market and your wagon
in the market ^ A. I bought it in New York ; yes, sir.

H. Y. Canfield, being duly sworn, testifies as follows :

By Mr. Sterne :

Q. What is your business ? A. Milk business.

Q. How long have you been engaged in that business?
A. About twenty-two years.

Q. Where do you draw your milk from ? A. I am getting
the bulk of my milk at present from Dutchess County.

Q. Over what road does that come ? A. I have just com-
pleted an arrangement by which I am getting it by the boat ;
previous to that it came over the Hudson Eiver road.

Q. What do you pay per can ? A. Sixty cents ; I have paid
until the present sixty cents a can, and a dollar a can for con-
densed milk.

Q. How much milk do you ship? A. Well, something about
seventy cans at present.

Q. Seventy cans a day? A. Yes, sir.

Q. They didn't give you any special rate on milk, did they ?
A. No, sir.
88

724

Q. You we-.e compelled to pay sixty cents all the year round?
A. I have been ; yes, sir.

Q. How much have you paid in the way of freight on milk
in tlie pjist two years, do you know? A. You mean since I
have been in business ?

Q. Yes? A. Well, it figures up nearly $300,000 since ISf)?.

Q. To that one line? A. No, sir, it has been on different lines.

Q. No reduction has been made in the milk that you get,
has there? A. In freights ?

Q. Any reduction of the freight ? A. No, sir.

Q. Since you receive your milk at lower rates, who gets the
benefit of that, the farmer or you? A. The farmer; this
morning is the first morning I have had any lower rate, that
is, b}- boat ; I am now gettinc; it at 40 cents a can.

Q. And the farmer gets the difference in the freight? A.
Since the first of May up to the present time I was to pay the
farmers a cent and a half a quart provided I had to pay 60
cents freight ; if there theie was any arrangement made by
which the freight could be reduced I was to pay them two
cents ; that takes effect to-day.

Q. Henceforth you pay them two cents? A. I do.

Q. Th;\t gives them the benefit of the difference in the
freight .'' A. As far as I am concerned it does. •

Q. What boat brings your milk ? A. Well, I disremember
the name of the boat.

Q. Does that liltle branch line bring it to the boat ? A.
The Dutchess & Columbia road brings it to the boat, if I
understand it .correctly.

Q. Do they own the boat ? A. I understand that they have
bought the boat.

Q. They carry at 40 cents? A. Yes, sir.

Q. Did you ever get any hay from the stations where you
get milk ? A. I have.

Q What did you pay per car at those stations for hay ? A.
About $22 a car load ; that is for the use of the car.

Q. It came over the Hudson Eiver road ? A. Yes, sir ; that
is, the car was chartered at Pine Plains, where I got the hay ;
it came from there.

Q. Did you ever receive any pay from the railroad company
for loss sustained ? A. Yes, sir.

Q. For loss sustained by shortage ? A. No, sir.

'95

Q. What sort of losses do tliey pay for? A. In case of
collision whenever they had spilled milk I have on one or
two occasions had it refunded.

Q. During the many years that you have had milk brought
over the Hudson River Railroad, how often has there been a
case of collision or loss sustained by you on which you made
a claim and received payment? A. There is many times I
have received great loss from the train being very much behind
time.

Q. How many times have you received payment from the
company? A. Three times, I think; I wouldn't be positive;
it might be four, and possibly five, but I think not.

Q. Have they paid the loss arising from delay? A. No,
sir ; I have never received any under such circumstances.

Q. Have you made a claim? A. I have not.

Q. You understood that they didn't pay that ? A. I never
understood that they ever paid any such thing.

Q. Do you know how many cans a car will hold ? A. Well, I
dou't know that I could tell positively ; I have been told there
has been 280 crowded into a car if necessary ; but I think they
don't generally carry as many as that.

Q. How does a milk car differ from an ordinary freight car?
A. Well, I know nothiug about the ditference. with the excep-
tion that it is a tight box c ir — plain tight box car.

Q. Do you fetch the milk from the car ? A. I draw it from
the de'pot.

Q. From the freight depot? A. Yes, sir.

Q. And the farmer brings it to the car, does he ? A. The
farmers deliver it at the car ; at the stations where I get it
the farmers put it into the oars themselves.

By Mr. Depew :

Q. Your milk comes over the line of the Dutchess &
Columbia road? A. Principally; yes, sir.

Q. And the freight that you pay is the Hudson River freight,
plus the Dutchess & Columbia freight, isn't it? A. I don't
know anythiug about the "plus;" simply get a way bill
of the Hudson River Railroad — so many cans of milk, so
much freight.

Q. Do you think the Dutchess & Columbia carry it for

796

nothing? A. Well, I should judge not, sir; I liave never
known of any corporations doing business in that way.

Q. That is a poor bankrupt road, isn't it? A. Well, I
couldn't tell you that ; I never heard that it was.

Q. You don't know that it has very hard work to pay even
its running expenses, do yon ? A. I do not ; no, sir.

Q. It is ooly the business along the line of the Dutchess
& Columbia where any concession has been made to the
farmer, isn't it ? A. No, sir ; I think not ; the farming dis-
tricts in Orange County, that produce milk for New York, get
the benefit of the reduction.

Q. Do they in Putnam, Westchester, Dutchess and Colum-
bia ? A. Well, they do in Dutchess, and some in Columbia.

Q. And ou the line of the Harlem road ? A. On the line of
the Harlem ; I don't know that I can say anything positive
about that.

Q. You simply know op. the line of the Dutchess & Colum-
bia road ? A. That is all I know personally about.

Q. Then the only concession that is made is made to those
on the line of the Dutchess & Columbia road in order to induce
them to ship by boat, isn't it? A. Well, it is not in order to
induce them ; the inducement to them to ship by boat is,
they get the benefit of the half cent.

Q. Have you lowered the price of your milk any since the
1st of May ? A. What do you mean ; the retail price.

Q. Yes. A. Yes, sir.

Q. How much ? A. Well, about a cent.

Q. Made a general reduction siuce the 1st of May? A.
Weil, only to the wholesale trade.

Q. Only to the wholesale trade ? A. That is all.

Q. Your retail trade to families is just the same ? A. The
same as it was last season ; I am paying the same price I was
last season.

Q. What justification have you foy charging the consumer
as much as you did before, when you are getting it by boat
for fifteen cents less ? A. Because 1 am giving the difference of
the half cent to the farmer ; my milk costs me precisely as
much to-day as it did yesterday, when I was paying the
raih-oad sixty.

Q. And the Dutchess and Columbia farmer gets the whole
of it ? They do with me.

797

Q. And the consumers don't get aoy of it ? A. They do not.

Q. Then the commerce of the City of New York has not
been improved any by that ? A. By the railroad reduction in
freight ?

Q. Yes. A. Well, I presume in some cases it has ; I should
rather judge it had to a certain extent ; I presume on the line
of the Harlem road that the farmer and the milkman have
divided the fifteen cents that they have got off as near as I can
understand.

Q. The farmers tell me not; do you charge the same to all
your customers ? A. All my private families, yes, sir.

Q. Do you charge the same to all your customers ? A. I
don't charge the same to wholesale customers that I do to a
private family.

Q. What is the difference ? A. Well, it depends on the
quantity and arrangement.

Q. What is the highest price ? A. Eight cents.

Q. What is the lowest ? A. Five.

Q. Then, there is three cents difference ? A. Yes, sir.

Q. What is that based on ? A. Based on the quantity they
use, not oa the quality, sir ; all get alike from me.

Q. You don't water your milk? A. Well, if you want to
make arrangements about milk, I'll give you all the particulars ;
if you dou't, I don't see that it is necessary to go into details ;
if you would like to be supplied with two or three hundred
quarts, I am ready to make arrangements with you.

Q. This hay that you got was on the line of the Dutchess &
Columbia road, was it ? A. From Pine Plains, Dutchess
County, New York ; yes, sir.

Q. How much did you pay a car ? A. Twenty-two dollars.

Q. Do you know how much of that the Dutchess and
Columbia charged? A. I don't know anything about that,
sir ; that is their figures from there.

Q. Then, you are not sure but what the Dutchess &
Columbia may have charged two-thirJs of it? A. I couldn't
tell you anything about that, sir ; that is their figures to me
there.

Q. The Dutchess & Columbia is a local road, isn't it ? A.
They run from Pine Plains to Fishkill.

Q. Twenty-eight miles ? A. Yes, sir : I don't know the ex-
act distance.

798

Q. Do you know anything about the condition of the
Harlem road ? A. Of the stocks of the Harlem road ?

Q. Do you know whether that is a local or through road?
A. Well, I don't know that I have a right to say that I do.

Q. I suppose you don't? A. I am not interested enough
to swear to anything.

Q. Have the milk dealers an association ? A .Well, there is
what is called the " New York Milk EKchange," composed of
milkmen.

Q. Do they fix prices in that association ? A. For what ?

Q. For what they pay the farmer? A. The association
and the farmers' association meet and make prices.

Q. Do the milk dealers themselves associate ? A. No, sir.

Q. And decide what they will give "the farmers ? A. There
never has been any price made except with the joint committee
of the farmers and milkmen — not to my knowledge.

Q. This committee fixes what they will pay the farmers,
don't they? A. This committee, with the farmers' committee
talk it over together and make their price ; they vote on it,
each one casting so many votes; that is the way it is done ; it
is done by ballot.

Q. Does the farmers' committee vote by itself and the milk
dealers' committee by itself ? A. No.

Q. Supposa there were five farmers and five milk dealers,
do the five farmers cast one vote and five milk dealers an-
other? A. Well, if it is a split, some one proposes to com-
promise the matter in some way, and it is voted on again —
that is, if they have a tie vote ; some time is lost in organiza-
tion, and they try to come to a fair understanding so that they
may be both mutLially benefited, and know what they are
going to receive.

Q. Is there an over production of milk in the New York
market ? A. .There has been a very big over production of
milk this season.

Q. That is, more than the market wanted ? A. Yes ; the
market is what you might call flooded.

Q. What do you do with the surplus milk ? A. Well, I
churn mine.

Q. Do you pay the farmer the same for that which is churn-
ed ? A. I do : the same.

799

JRii/ns T. BvsJi, being duly sworn, testifies as follows :

By Mr. Sterne :

Q. What is your business ? A. Refining petroleum.

Q. How long have you been engaged in the refining of pe-
tioleum ? A. Since 1870.

Q. Where do you draw your crude petroleum from ? A.
From the oil district in Pennsylvania — chiefly from the north-
ern district — what is known as the Bradford district, of late.

Q. Over '■vhat roads do you obtain your oil ? A. Well, in
the winter time — last winter we brought some over the Penn-
sylvania road ; in the summer time, through the canal.

Q. Do you use the New York roads at all — the New York,
Lake Erie & Western, or New York Central Railways ? A.
Well, we tried to use the New York & Erie, but we didn't suc-
ceed in getting an}' cars, except ten, that I believe were loaded
through mistake ; they didn't intend to give them to us.

Q. When was that ? A. I think it was the last of May, or
early part ot June, last year.

Q. The eaily part of June? A. Well, I am not quite clear
on that ; but the early part of the summer.

Q. Well, what answer did you get? A. It first came about
in this way — sh;dl I make my statement ?

Q. Yes. A. We were going lo Buffalo with reference to
opening this canal route, and we discovered a large number of
Erie cars standing on the side tracks at various places, and at
one place — I tbink it was at Hornellsville — I got off and
sounded some of the cars with my stick that I hand in my hand,
and found they were empty ; we found a considerable number
of them ; our agent was with us ; we went on to Buffalo — Mr.
Lombard and myself —and our agent went to Oloan, and from
there he went to Carrolton ; but what I am stating now with
reference to the transactions at Carrolton, I didn't witness my-
self.

Q. Well, then, don't state it ; what did your efforts result
in ? A. Resulted in a promise of a hundred cars, of which
we got ten afterwards through mistake, as I understood it.

Q. How long did you wait for your ten cars ? A. Oh, I
think it was four or six weeks.

Q. What was the rate at which petroleum was carried at

800 •

that time? A. The open rate from the Bradford district was
$1.25 ; from the lower region, $1.40.

Q. What was the rate to the Standard Oil Company ? A.
Well, we never knew positively, but the investigation in Penn-
sylvania showed it to be from 65 to 70 cents.

Q. What was the result of the Standard Oil Company's
anangernent with the various railways, upon the petroleum
trade? A. The result has been to crush out and grind ont
everybody that was not in their interest, and I believe they
succeeded with all except five here in New York.

Q. You are one of the five? A. I am one of the five ; yes,
sir, five firms.

Q. How do you obtain petroleum now? A. Well, we have
obtained some through the canal this spring, and we are about
ready to receive it through the Tidewater Line, a new liue
that is opened ; they are in operation, and have already brought
several thousand barrels to the seaboard; a year ago now every
avenue to the sea was shut up against us, and the only thing
we could do was to open some sort of line for ourselves ; we
went west, and built a line, known as the Equitable ;
we then built some cars, and put them ou the New York, Buf-
falo & Philadelphia Eailroad ; we built some tank boats for
the canal, andj from the 27th day of July to the close of the
canal, we succeeded in bringing 200,(j00 barrels of oil ; this
spring we commenced again, but, before we had gone very far,
the Tidewater Line was completed and in operation.

Q. Do you say the trunk lines were closed against you ?
A. Every avenue to the sea was closed against us, except at a
very large rate of freight.

Q. So high that you conld not compete with the Standard ?
A. The rate was so high that if we hadn't done something, we
would have beea entirely ground out ; at the rate of freight we
had to pay and the rate at which refined oil was being sold in
■ the market, it was absolutely a little less than cost ; so, evident-
ly all the profit that the Standard Oil Co. got, they got out of the
railroad in the shape of rebates, for if they had paid the rate of
frc^ight that we were required to pay, they certainly could not
make any profit in refining, for we could refine as cheap as
they ; I am satisfied of that ; after opening this canal route
we succeeded in bringing this amount of oil last year through,
and started it again this spring ; as soon as the canal route

801

was opened, last year at a convention held at Saratoga, the
rail rate on oil was put down to meet the canal, as I under-
stood, but this spring again when we opened, it was put down
and publi-hed at eighty-five cents, evidently to meet the canal
cost.

Q. Eighty-five cents for what ? A. Eighty-five cents a bar-
rel instead of |i.25.

Q. That was the open rate ? A. The open rate.

Q. There was a secret rate, was there ? A. We have good
reason to believe so ; yes, sir.

Q. What is the open rate now? A. The open rate now is
thirty cents a barrel, instead of $1.25.

Q. How much does a barrel of petroleum weigh? A. I
think it is a little under 30L) pounds — 295 or 297 ; it is 6|
pounds to the gallon, 45 gallons a railroad barrel ; we pay
freight on 45 gallons.

Q. And they carry that from the oil region for how much per
barrel ? A. They advertise to bring it for thirty cents now,

Q. Is it brought lower ? That I can't say ; we believe it is.

Q. How much lower.? A. We believe it is brought ten cents
lower for the Standard Oil Co. — we think so — from the mouth
of the pipe ; at least it was stated to me by gentlemen who
have better means of knowing than I have, that that was the
rate.

Mr. Shipman — You are asking for this man's belief.

The Witness — I can give you the names of the gentlemen
whom you can subpoena, and give you these facts, if necessary.

Q. Who are they ? A. Is it necessary to state that here ; I
would rather give it to you, if I can.

Q. To me, personally ? A. Yes ; there is no secret about
it, because they are perfectly willing to come here and testify.

Q. What is the distance from the oil regions to New York ?
A. The distance that the Standard Oil Company have to haul
their oil is about four hundred and twenty miles, I believe, on
the average..

Q. Do the oil cars go back empty ? A. I believe they do ;
yes, sir ; they have to go back empty.

Q. How long is it since the Standard Oil Company have
thus obtained the monopoly of oil carriage for itself? A.
Well, absolutely since its purchase- of the Empire line, and
previous to the purchase of the Empire line.
89

802

Q. Yon mean the Pennsylvania Empire Freight line? A,
Yes, sir ; previous to that they had an arrangement with the
Empire Freight line, whereby they seemed to control it.

Q. Have you ever made any effort to obtain transportation
over the New York Central Eailway ? A. "We made an effort
to procure terminal facilities upon the North river, which were
necessary, and we had one or two interviews in reference to
putting cars on the road.

Q. Did you succeed in obtaining any transportation ? A.
We did not ; no, sir.

By the Chairman :

Q. Were you refused any? A. In the interview with Mr.
Vanderbilt, he stated, that if we would build cars and put
them on his road he would haul them ; but he wouldn't give
us any rate of freight, but we must procrire and provide our
own terminal facilities ; and I spent three days going up and
down the Noith river to find a place where we could locate
tanks ; I didn't find any, and we fiuEilly gave the thing up.

By Mr. Sterne :

Q. How does the Standard Oil Company get its terminal
facilities ? A. They have a pump at Sixty-fifth street, whereby
they pump the oil through Central Park under the East Eiver
over to Hunters Point.

Q. And does the New York Central furnish them the facili-
ties ? A. No, sir ; I believe not.

Q. They furnish the facilities ; they, themselves ? A. I be-
lieve they do ; yes.

Cross-examination :

By Mr. Shipman :

Q. Do you know Mr. Olin ? A. Yes, sir.

Q. You were concerned in this purchase of oil that he asked
to have transported over the Erie road last year ? A. Yes,
sir.

Q. Upon which suit was brought ? A. Yes, sir.

Q. That oil was bought for the very purpose of having a conr
troversy with the Erie road ? A. No, sir ; that was legitimate
business ?

80S

Q. Did the Erie road refuse to carry that oil ? A. They re-
fused to carry it unless Charley Pratt & Co. didn't want the
cars ; if there was any cars over what he wanted, they would
carry it, but he always wanted them.

Q. Did you see a letter that Mr. Jewett wrote to Mr. Olin ?
A. I don't recollect that I did ; no, sir.

Q. Don't you kuowthat he told Mr. Olin that if he would pro-
vide tank cars, or would make a responsible contract with the
road, authorizing the road to buy those cars 'that he would
carry this out ? A. I offered Mr. Vilas, myself, to put a line of
tank cars on their road at once ; I had no interview with Mr.
Jewett.

Q. I ask if you did not see a letter to Mr. Olin ; Mr. Olin
was acting as agent for some of these oil men ? A. I don't
recollect that I saw it.

Q. What did you say you offered ? A. I offered Mr. Vilas
to put a line of tank cars on the Erie road, provided he would
haul them as cheaply as he would for the Standard Oil Com-
pany.

Q. When did you make that offer .? A. I made that some-
thing over a year ago.

Q. How many cars ? A. Well, a sufficient number to carry
the oil that we might require.

Q. You have stated that you saw some Erie tank cars
empty? A. Tes, sir.

Q. Do you know that those belonged to the Erie Railroad
Company ? A. I know some of them do, and I know some
belong to the Cnion Tank Line and the Standard Oil Company.

Q. Do you know whether those cars belonged to the Erie
Company, or the Standard Oil Company ? A. I saw some of
both kinds — ^some of the old Erie cars.

Q. Where did you see them ? A. At various points along
the road ; these cars that I sounded were either at Hornells-
ville or somewhere in that vicinity.

Q. Do you recollect the month ? A. The early part of the
summer ; I think it was the last of May or the first of June.

Q. The tank cars in which petroleum is transported in
modern times, can be used for nothing else can they? A.
Nothing that I know of.

Q. They are a special contrivance ? A. Yes.

804

By Mr. Blanchaed :

Q. You saw these cars at Hornellsville ? A. I saw them at
or near Hornellsville, I think ; I saw them at several places,
but those that I sounded

Q. Were at Hornellsville ? A. I think they were ; they were
somewheres in the side track.

Q. Were they attached to a locomotive? A. No, sir; I
didn't see any locomotive.

Q. Do you kuow that Hornellsville is the point where we
drop the locomotive of the Susquehanna Division and take up
the one on the Western Division ? A. I wouldn't testify they
were at Hornellsville, but I know they were standing on the
side track.

Q. You have said that some of them were at Hornellsville ?
A. I saw them at a great variety of places all along.

Q. Were they attached at any point to a locomotive ? A. I
don't recollect of seeing any attached to a locomotive at any
point.

Q. You said you did see some cars at Hornellsville? A. I
think I did but i won't testify they were at Hornellsville, that
they were in that vicinity.

Q. Do you know that that is the point where they drop the
locomotive of the Susquehanna Division and take up the
locomotive of the Western ? A. No, sir.

Q. Do you know whether these cars had come loaded from
Cleveland and were going back to Cleveland or not ? A. I
don't know.

Q. Do you know vsrhether they were cars belonging to the
Atlantic & Great Western road or not which must go back to
them ? A. I know that they are cars I have been accustomed
to see in New York and back and forth on the Erie road.

Q. Whereabquts in New York ? A. At Weehawken and
various places along on the road.

Q. How long since you have shipped any oil over the Erie
road ? A. We never shipped any oil over the Erie road, ex-
cept these ten cars ; I have often bought oil at Weehawken
that was shipped over the Erie road.

Q. But seeing a car at Weehawken you don't know whether
it comes from Cleveland or where it comes from, do you ? A.
Well, I couldn't testify from where it might have come the last
time.

805

Q. Did you know in which direction those cars you saw
were going ? A. I don't think I did ; no.

Q. You don't know whether they were oil cars that belonged
to the Standard Oil Company, the United States Rolling
Stock Company, the Atlantic & Great Western Railroad Com-
pany, or the Erie ? A. I know they were cars that were trans-
porting oil on the Erie road, from time to time.

Q. That is all you know? A. I know they were cars that
wore employed by the Erie Railroad — were at their disposal.

Q. How do you know they were at their disposal ? A. Be-
cause I have seen them in their use.

By Mr. Shipman :

Q. Don't you know that the Standard Oil Company has a
great many more tank cars than the Erie Railroad Company
going over the Erie also ? A. As I understand, the Erie has
300 and odd, and the Standard had 400 at last accounts.

Q. On what ground do you say that the Erie controls the
cars of the Standard Oil Company ? A. I saw cars at that
time that I was positive was the property of the Erie Railroad,
and Mr. Vilas acknowledged to me that they had between
three and four hundred cars, and I saw some of those cars ; I
saw also cars that I was satisfied belonged to the Standard
Oil Company.

By Mr. Blanchard :

Q. Do you know whether those cars had been ordered and
were going to fill an order ? A. I do not, sir ; I believe they
were standing to keep them out of service.

Q. That is a matter of belief ? A. Yes, sir ; entirely so ; I
think it is pretty well backed up by evidence — when we put in
a requisition and couldn't get them unless Pratt didn't want
them, and Pratt immediately wanted them, as soon as we did.

Q. You don't know whether he wanted them before or not ?
A. He didn't use them, but ho wanted them immediately as
soon as we wanted them.

Q. Do you know he didn't use them ? A. I know he was
not using them.

Q. At that moment ? A. Oh, well, such questions as that
are trifling, you know.

806

Q. Not at all. A. There is no use of talking nonsense on a
question of this kind.

The Chairman — The question is perfectly proper.

Q. (Read by stenographer.) At that moment ?

A. It is impossible for me to say whether they were ordered
at any place.

Q. You have stated that they were idle ? A. I beg your
pardon; I haven't stated any such thing — that they were
orderetL

Q. I said you said they were idle ? A. They were idle at
that moment.

Q. That is all you know about? A. And they had been
idle — a large number of them had been idle ; I was up and
down that road every week — had been — had seen theto idle
repeatedly ; I had seen, not these particular cars, but saw
other cars continually idle on the Erie road, and Mr. Olin
found a large number standing in the yard at Carrolton entirely
idle, and had been for several days, and the agent there
promised them to Mr. Olin.

The Chaieman — Mr. Bush just confine yourself to what you
know personally of your own knowledge.

By Mr. Blanchaed :

Q. Did you know when you made the proposition to Mr.
Vilas to run tank cars on the Erie road, that he was not the
proper officer to make any such proposition to ? A. I sup-
posed he was the proper officer to communicate through ; I
thought, perhaps, it would have to go to somebody else, but I
happened to be talking to him, and I made the remark to him ;
he said he would consult with others, and let me know,

Q. Did he ever return an answer, and ask you to put your
proposition in writing? A. ,Not to me ; no, sir.

Q. Did he ever say that to Mr. Olin ? A. I don't know.

Q. Did / ever say it to Mr. Olin ? A. I don't know what
you said to Mr. Olin ; you haven't said it to me.

Q. Did you ever ask me ? A. No, sir, not as I know of.

Q. Did Mr. Olin ever say to you that any officer of the com-
pany had asked him for a written proposition ? I don't re-
collect that he ever did.

Q. And he never showed you the letter of Mr. Jewett ? A.
I don't recollect any letter of the kind.

807
By Mr. Depew :

Q. You said that the New York Central offered you the
same rate if you would furnish the same facilities as the
Standard Oil Company V A. No, sir; they simply said they
would haul the cars but wouldn't give us any rate.

Q. Why did you look for the facilities ? A. Because we
looked on that as the most difficult thing to accomplish at the
time ; we thought if we could find a place to locate a yard, we
possibly might be able to make some arrangement ; we couldn't
find any yard ; so we didn't.

Q. Don't you know you would have got the same rate ? A.
We would not have built the cars until we had a contract of,
that kind ; we didn't go to any expense in looking, except a
little time ; I thought that was a preliminary step that was well
enough to take to show them that we were in earnest, because
we had been accused that we were just trifling, and didn't
mean business.

Q. But your search did not result in anything ? A. Did not
result in anything at the time.

Saiauel Goodman recalled.

By Mr. Stebne :

Q. Have you brought the letters you were asked to bring ?
A. I did, sir.

Q. Asking you to give special rates to parties in this State ?
A. Yes, sir.

Q. Will you produce them ? A. Yes, sir ; here they are (pro-
ducing two letters).

Q. Are those all you could find ? A. Those are all you asked
me to produce at the time.

The letters are .received in evidence, and are as follows :
" New York Central and Hudson Kiver Eailroad, General
Western Freight Agent's Office, Bufifalo, May 19th, 1879. S.
Goodman, Esq., A. G. F. Ag't, New York. Dear Sir -Have
arranged with Messrs. HofTeld & Geisler to transport their
shipments of leather in rolls and goat skins pressed in bales
from Biaffajo to Boston, at b5 cents per hundred pounds—

; ■ 808

Buffalo to Boston. Please issue necessary orders. Yours re-
spectfully, W. H. Cummings, G. W. F. A."

" New York Central and Hudson Kiver Kailroad, General
Western Freight Agents Office, Buffalo, April 7tli, 1879. S.
Goodman, Esq., Ass't Gen. P'reight Ag't, New York. Dear
Sir — Have arranged with G. C. Coit to transport his shipments
of tallow and grease from Buffalo to New York, at 17^ cents
per hundred pounds, as other roads offered him that rate.
Please issue necessary orders. Yours truly, W. A. Cummings,
G. W. F. A."

Q. What other railroads are there at Buffalo competing for
freight to New York ? A. The Pennsylvania Central Road.

Q. What other ? A. The Erie Railway.

Q. Is there any other to Boston ? A. No, sir.

Q. The Pennsylvania Central and the Erie ? A. Yes, sir ;
The Grand Trunk from Black Rock.

Q. Then Buffalo freight is competed for with the New York
Central by the Pennsylvania Central ? A. Yes, sir.

Q. By the Erie ? A. By the Erie ; yes, sir.

Q. By the Grand Trunk ? A. Yes, sir.

Q. And the canal ? A. And the canal.

Mr. Steene — Mr. Bush desires to correct his testimony as
to the rate.

Mr. Bush — The rate formerly prevailing from the northern
region is $1.15, instead of $1.25.

The examination of Mr. Ooodman was then resumed, as fol-
lows :

Q. You made the rate for A. T. Stewart & Co. ? A. Yes,
sir.

Q. Was that to build up and develop their business ? A.
Yes, sir.

Q. That was the object ? A. That was one of the objects.

Q. January 11th, 1879 ? A. Yes, sir.

Q. You thought that business was not yet sufficiently built
up and developed ? A. No, sir ; not the manufacturing part
of it.

Q. How long had the factories of A. T. Stewart & Co. been

803

in existence? A. The one at Dutcliess Junction about three
years, I think ; it isn't completed yet.

Q. And they were languishing and suffering ? A. To a great
extent ; yes, sir.

Q. And you acted as a fostering mother to A. T. Stewart &
Co. to build it up ? A. Yes, sir ; I added my mite to develope
their traffic; we wanted to carry the freight; boats might have
carried it in the summer.

Q. Could have carried it in winter, too? A. Ten months
out of twelve.

Q. During those two months could anybody else have car-
ried it ? A. Yes, it might have gone by the Erie road to New-
burgh, and crossed the river on the ice.

Q. Sledded it across ? A. Yes.

Q. They might have sledded it down to New York too ? A.
They might have.

Q. Just as easy ? A. No, not as easy ; it would have taken
three or four days.

Q. Do you know A. M. Palmer & Co. ? A. At Syracuse ?

Q. Yes. A. Yes, sir.

Q. What was the special object in giving them a rate ? A.
To develope their business.

Q. Were they suffering and languishing? A. Not particu-
larly, but they wanted to compete with other wholesale dealers
in Syracuse.

Q. They asked you to develope their business, so that they
could compete ? A. Yes, sir.

Q. Do you know anything of Barber & Co. ? A. At Auburn ;
yes, sir.

Q. What do they do ? A. Manufacture carpets.

Q. How long have they been manufacturing carpets ? A.
About fifteen years.

Q. You made a contract with them ? A. Made then a spe-
cial rate — not a contract.

Q. You made bhem a special rate in 1877 ? A. Yes ; 1879.

Q. After they had been at work fifteen years, was that to
develope their business ? A. Oh, they have had special rates
all those years before, sir.

Q. AH the time ? A. Yes, sir.

Q. Got their business developed in that way, did they? A.
Yes, sir.

810

Q. Ajid you continued that development ? A. For the last
fifteen years ; Yes, sir.

Q. Do •you know anything about Adriance, Piatt & Co. ? A.
Yes.

Q. How long have they been in business ? A. Oh, about
twenty years, X guess.

Q. Do a large business ? A. A very large business ; they
make from 5,000 to 7,000 mowing machines a year.

Q. You gave them a special rate ? A. Yes, sir.

Q. In 1879 ? A. Zes sir.

Q. Was that to develops their business? A. Yes, sir ; help
them to retain it also.

Q. So you don't confine yourselves simply to the developing
of business; but also go into the business of retaining
business ? A. Certainly ; we don't want them to lose it afte r
they get it once — not if we can help it.

Q Do you know anything of G. 0. Buell & Co. ? Yes, sir.

Q. You wanted to develope their business ? A. Yes, sir ;
they are at Eochester — wholesale dealers.

Q. How large was their business at that time, and how large
is it now? A. I couldn't tell you positively ; I haven't got, the
exact figures.

Q. You say you don't know whether your process succeeds
in developing business or not ; you don't follow it up so far,
do you ? A. Well, our increase ot business shows it anyway,

Q. How is it about Brewster, Gordon & Co ? A. They are
also wholesale dealers at Eochester.

Q. How long have they been in business ? A. Fifteen or
twenty years ; perhaps longer.

Q. How long have they had special contracts ? A. For the
last ten years to my knowledge.

Q. Always at thirteen cents a hundred ? A. Not always at
that price, no, sir.

Q. Generally higher ? A. Sometimes higher.

Q. Sometimes lower? A. It has never been lower than
that.

Q. That was the lowest ? A. That was the lowest.
Q. Then you had a special reason for developing their
business in this case? A. Oh it is a part of our general
policy to develop all the business on the line of our road.
Q. In that particular instance what induced you to follow

811

that general policy? A. We wanted to place them on an
equal footing with others in the City of Eochester as far as we
could.

Q. Do you know H. 8. Ballou, of Eochester ? A. T do not.

Q. He seems to be a grocer there? A. A small concern,
perhaps.

Q. Small concerns are not worth developing, according to
your opinion ? A. Our tariff rates are low enough for them at
Eochester.

Q. That is to say, a small concern ought to pay 40, 30, 25
and 20 as against a large concern, 13 ; that is your rule? A.
Well, if he is a grocer, most of his business is fourth class
freight.

Q. And he ought to pay '20 as against 13 ? A. Yes, sir.

Q. That small man has no right to develope ? A. He has
the same chance that the other man has.

Q. At 20 against 13 ? A. Oh, yes.

Q. Do you call that the same chance ? A. About the same
chance ; Yes, sir.

Q. You consider it the same chance. A. Yes, sir.

Q. How does the 13 cents develope the other man '^ A.
The 13 cent rate is given to the wholesale man who sells goods
all over the State,

Q. How does the 13 cents develope the other man ? A. One
man sells at wholesale, and the other at retail ; that is all the
difference.

Q. One man can sell at wholesale, because he gets it at 13,
and the other can't ? A. The other man never asked for it, I
suppose.

Q. How do you know he never asked for it ; you give him
no chance ? A. If he would ask for it, perhaps we would ; he
seemed to be well satified ; he didn't find any fault.

Q. You don't know ; you didn't ask him ? A. We would
have heard from him soon enough.

Q. All that you know of the parties mentioned in these let-
ters in the application made to you by Mr. Cummings for
special rates is what is contained in these letters ? A. Yes, sir.

By Mr. Depew :

Q. How much of the total business at Syracuse do the New
York Central do ? A. About 90 per cent, at least.

812

Q. That is of the whole business of the City ? A. Yes, sir.

By Mr. Steese :

Q. How do you know ? A. Oh, from facts before me.

Q. What facts are before you? A. I know the amount of
freight we carried last year.

Q. How do you know what freights were carried by canal ?
A. Oh, I can guess very near.

Q. How do you know what freight was carried by other
lines? A. By seeing their cars and obtaining information
through, our agents.

Q. What other line is there at Syracuse ? A. The Dela-
ware, Lackawana & Western.

Q. Did you get regular returns from the Delaware, Lacka-
wanna & Western ? A. N ot from them, but our agents.

Q. And you undertake to say that, as against the canal and
the Delaware, Lackawanna & Western, you carry ninety per
cent, of the freight of Syracuse ? A. Yes, sir ; of the mer-
chandise.

Q. You mean first class] merchandise? A. First, second,
third and fourth class goods ; manufactured goods.

Q. The canal doesn't carry fourth class goods to Syracuse ?
A. Not very much ; no, sir.

Q. Why is that ? A. I don't know why they don't.

Q. Is it because you make all rail contracts against the
canal ? A. Not altogether, but it is owing in some degree to
that.

Q. Don't you make all rail contracts ? _^ A. I make special
rates, all rail, yes, sir.

Q. And that means that they'musn't use the canal during
the summer months ? A. That is one of the conditions.

By Mr. Depew :

Q. Have any complaints been made, in any number, from
Syracuse, Auburn, Kochester, or Utica, of discriminations as
against the places, or individuals in the places? A. No, sir;
never have, to my knowledge.

Q. Have any been made ? A. I don't know of five cases in
my experience in this last three years.

Q. Are there any petitions presented to you, as requests

813

from those places that the schedules or other rates shall be
changed ? A. No, sir ; there is not.

By Mr. Steene :

Q. How much do you do in the^way of business to and from
Syracuse ; what is your tonnage a year ? A. Last year we
carried out of Syracuse 380,000 tons, or 88,000 car loads, and
brought into Syracuse about 200,000 tons or 20,000 car loads.

Q. How do you know that? A. From figures obtained
through our ageUt at Syracuse.

Q. Couldn't yon get from all the agents along the line how
much is done at all your local points ? A. It could be done,
but it would require six months to do it.

Mr. Stsene — Now, if the CommitteQ please, there are a
number of facts which are promised to this Committee ; Mr.
Butter was to furnish to this Committee some information
that he was asked for ; what is to be done in relation to the
books ?

The Chairman — We will have to make some arrangement to
have them examined in the interval.

Adjourned to July 9th, 1879, at ten o'clock A. M.

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Full text of "Proceedings of the Special Committee on Railroads : appointed under a resolution of the Assembly to investigate alleged abuses in the management of railroads chartered by the state of New York"

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